10-Q

t

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021 OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________________ TO __________________

Commission file number 000-53528

Embassy Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania	26-3339011
(State of incorporation)	(I.R.S. Employer Identification No.)
One Hundred Gateway Drive, Suite 100 Bethlehem, PA	18017
(Address of principal executive offices)	(Zip Code)
(610) 882-8800
(Registrant’s Telephone Number)

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes  x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ¨	Accelerated Filer ¨
Non-Accelerated Filer 	Smaller Reporting Company
Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 or the Exchange Act.)  Yes ¨ No x

Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date:

COMMON STOCK
Number of shares outstanding as of May 7, 2021	($1.00 Par Value)	7,516,783
	(Title Class)	(Outstanding Shares)

Embassy Bancorp, Inc.

Table of Contents

Part I – Financial Information	3
Item 1 – Financial Statements
Consolidated Balance Sheets (Unaudited)	3
Consolidated Statements of Income (Unaudited)	4
Consolidated Statements of Comprehensive Income (Unaudited)	5
Consolidated Statements of Stockholders’ Equity (Unaudited)	6
Consolidated Statements of Cash Flows (Unaudited)	7
Notes to Consolidated Financial Statements (Unaudited)	8
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3 – Quantitative and Qualitative Disclosures About Market Risk	37
Item 4 – Controls and Procedures	37
Part II - Other Information	38
Item 1 - Legal Proceedings	38
Item 1A - Risk Factors	38
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3 - Defaults Upon Senior Securities	38
Item 4 – Mine Safety Disclosures	38
Item 5 - Other Information	38
Item 6 - Exhibits	39

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Embassy Bancorp, Inc.

Part I – Financial Information

Item 1 – Financial Statements

Consolidated Balance Sheets (Current Period Unaudited)

	March 31,		December 31,
ASSETS	2021		2020
	(In Thousands, Except Share Data)
Cash and due from banks	$	14,405	$	14,528
Interest bearing demand deposits with banks		104,709		116,379
Federal funds sold		1,000		1,000
Cash and Cash Equivalents		120,114		131,907
Securities available for sale		164,084		130,940
Restricted investment in bank stock		1,330		1,330
Loans receivable, net of allowance for loan losses of $11,034 in 2021; $10,570 in 2020		1,087,757		1,079,339
Paycheck Protection Program loans receivable		47,714		54,334
Premises and equipment, net of accumulated depreciation		3,195		3,346
Bank owned life insurance		25,337		25,189
Accrued interest receivable		3,114		3,136
Other assets		12,966		12,509
Total Assets	$	1,465,611	$	1,442,030
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	291,411	$	269,996
Interest bearing		1,014,197		962,383
Total Deposits		1,305,608		1,232,379
Securities sold under agreements to repurchase		9,594		13,612
Long-term borrowings		14,651		14,651
Paycheck Protection Program Liquidity Facility borrowings		-		50,794
Accrued interest payable		1,069		1,640
Other liabilities		20,658		16,780
Total Liabilities		1,351,580		1,329,856
Stockholders' Equity:
Common stock, $1 par value; authorized 20,000,000 shares;
2021 issued 7,650,032 shares; outstanding 7,516,783 shares;
2020 issued 7,637,216 shares; outstanding 7,528,967 shares;		7,650		7,637
Surplus		26,651		26,405
Retained earnings		81,004		76,960
Accumulated other comprehensive income		907		2,937
Treasury stock, at cost: 133,249 and 108,249 shares at March 31, 2021 and
December 31, 2020, respectively		(2,181)		(1,765)
Total Stockholders' Equity		114,031		112,174
Total Liabilities and Stockholders' Equity	$	1,465,611	$	1,442,030

See notes to consolidated financial statements.

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Embassy Bancorp, Inc.

Consolidated Statements of Income (Unaudited) 

	Three Months Ended March 31,
	2021			2020
INTEREST INCOME
Loans, including fees	$	10,128	$	10,190
Paycheck Protection Program loans, including fees		1,100		-
Securities, taxable		326		377
Securities, non-taxable		206		212
Short-term investments, including federal funds sold		29		76
Total Interest Income		11,789		10,855
INTEREST EXPENSE
Deposits		1,093		1,995
Securities sold under agreements to repurchase and federal
funds purchased		2		10
Short-term borrowings		-		51
Long-term borrowings		27		8
Paycheck Protection Program Liquidity Facility borrowings		15		-
Total Interest Expense		1,137		2,064
Net Interest Income		10,652		8,791
PROVISION FOR LOAN LOSSES		465		320
Net Interest Income after ‎   Provision for Loan Losses		10,187		8,471
OTHER NON-INTEREST INCOME
Merchant and credit card processing fees		69		77
Debit card interchange fees		185		133
Other service fees		106		117
Bank owned life insurance		148		(27)
Gain on sale of securities		24		-
Total Other Non-Interest Income		532		300
OTHER NON-INTEREST EXPENSES
Salaries and employee benefits		2,884		2,839
Occupancy and equipment		919		858
Data processing		666		636
Merchant and credit card processing		2		30
Advertising and promotion		186		296
Professional fees		208		236
FDIC insurance		123		51
Loan & real estate		75		68
Charitable contributions		194		289
Other		428		429
Total Other Non-Interest Expenses		5,685		5,732
Income Before Income Taxes		5,034		3,039
INCOME TAX EXPENSE		990		582
Net Income	$	4,044	$	2,457
BASIC EARNINGS PER SHARE	$	0.54	$	0.33
DILUTED EARNINGS PER SHARE	$	0.53	$	0.33

See notes to consolidated financial statements
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Embassy Bancorp, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended March 31,
	2021			2020
		(In Thousands)
Net Income	$		4,044	$		2,457
Change in Accumulated Other Comprehensive (Loss) Income:
Unrealized holding (loss) gain on securities available for sale		(2,546)			1,803
Less: reclassification adjustment for realized gains		(24)			-
		(2,570)			1,803
Income tax effect		540			(378)
Net unrealized (loss) gain		(2,030)			1,425
Other comprehensive (loss) income, net of tax			(2,030)			1,425
Comprehensive Income	$		2,014	$		3,882

See notes to consolidated financial statements.

5

Embassy Bancorp, Inc.

Consolidated Statements of Stockholders’ Equity (Unaudited)

	Three Months Ended March 31, 2020
	Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Total
	(In Thousands, Except Share Data)
BALANCE - DECEMBER 31, 2019	$	7,544	$	25,937	$	65,794	$	1,340	$	(1,000)	$	99,615
Net income		-		-		2,457		-		-		2,457
Other comprehensive income, net of tax		-		-		-		1,425		-		1,425
Common stock grants to directors, ‎   12,757 shares		13		135		-		-		-		148
Common stock grants to officers, 19,453 shares
and compensation expense recognized on
stock grants, net of unearned compensation
expense of $639		19		25		-		-		-		44
Shares issued under employee stock purchase
plan, 1,289 shares		1		13		-		-		-		14
Purchase of treasury stock, 40,000 shares ‎   at $18.00 per share		-		-		-		-		(720)		(720)
BALANCE - MARCH 31, 2020	$	7,577	$	26,110	$	68,251	$	2,765	$	(1,720)	$	102,983

	Three Months Ended March 31, 2021
	Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Total
	(In Thousands, Except Share Data)
BALANCE - DECEMBER 31, 2020	$	7,637	$	26,405	$	76,960	$	2,937	$	(1,765)	$	112,174
Net income		-		-		4,044		-		-		4,044
Other comprehensive loss, net of tax		-		-		-		(2,030)		-		(2,030)
Common stock grants to directors, ‎   12,009 shares		12		174		-		-		-		186
Compensation expense recognized on stock
grants, net of unearned compensation expense
of $698		-		60		-		-		-		60
Shares issued under employee stock purchase
plan, 807 shares		1		12		-		-		-		13
Purchase of treasury stock, 25,000 shares ‎   at $16.65 per share		-		-		-		-		(416)		(416)
BALANCE - MARCH 31, 2021	$	7,650	$	26,651	$	81,004	$	907	$	(2,181)	$	114,031

See notes to consolidated financial statements.

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Embassy Bancorp, Inc.

Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended March 31,
	2021		2020
	(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	4,044	$	2,457
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		465		320
Amortization of deferred loan costs		51		78
Accretion of deferred Paycheck Protection Program loan fees		(964)		-
Depreciation		197		203
Net amortization of investment security premiums and discounts		95		58
Stock compensation expense		246		192
(Income) loss on bank owned life insurance		(148)		27
Realized gain on sale of securities available for sale		(24)		-
Loans originated for sale		-		(659)
Decrease (increase) in accrued interest receivable		22		(31)
Decrease in other assets		83		153
Decrease in accrued interest payable		(571)		(1,196)
Increase in other liabilities		475		143
Net Cash Provided by Operating Activities		3,971		1,745
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available for sale		(57,533)		(1,489)
Maturities, calls and principal repayments of securities available for sale		21,402		6,203
Proceeds from sales of securities available for sale		3,333		-
Net increase in loans		(8,934)		(18,314)
Net decrease in Paycheck Protection Program loans		7,584		-
Net redemption of restricted investment in bank stock		-		137
Purchases of premises and equipment		(46)		(300)
Net Cash Used in Investing Activities		(34,194)		(13,763)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits		73,229		16,166
Net (decrease) increase in securities sold under agreements to repurchase		(4,018)		3,177
Proceeds from Employee Stock Purchase Plan		13		14
Decrease in short-term borrowed funds		-		(18,067)
Proceeds from long-term borrowed funds		-		14,651
Repayment of Paycheck Protection Program Liquidity Facility borrowed funds		(50,794)		-
Purchase of treasury stock		-		(720)
Net Cash Provided by Financing Activities		18,430		15,221
Net (Decrease) Increase in Cash and Cash Equivalents		(11,793)		3,203
CASH AND CASH EQUIVALENTS - BEGINNING		131,907		39,986
CASH AND CASH EQUIVALENTS - ENDING	$	120,114	$	43,189
SUPPLEMENTARY CASH FLOWS INFORMATION
Interest paid	$	1,708	$	3,260
Income taxes paid	$	200	$	-
Non-cash Investing and Financing Activities:
Transfer of loans held for investment to held for sale	$	-	$	659
Right of use assets obtained in exchange for new operating lease liabilities	$	635	$	-
Unsettled trades to purchase securities	$	2,987	$	-
Unsettled purchase of treasury stock	$	416	$	-

See notes to consolidated financial statements.

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Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Note 1 – Basis of Presentation

Embassy Bancorp, Inc. (the “Company”) is a Pennsylvania corporation organized in 2008 and registered as a bank holding company pursuant to the Bank Holding Company Act of 1956, as amended (the “BHC Act”). The Company was formed for purposes of acquiring Embassy Bank For The Lehigh Valley (the “Bank”) in connection with the reorganization of the Bank into a bank holding company structure, which was consummated on November 11, 2008. Accordingly, the Company owns all of the capital stock of the Bank, giving the organization more flexibility in meeting its capital needs as the Company continues to grow. Embassy Holdings, LLC (the “LLC”) is a wholly-owned subsidiary of the Bank organized to engage in the holding of property acquired by the Bank in satisfaction of debts previously contracted. As such, the consolidated financial statements contained herein include the accounts of the Company, the Bank and the LLC. All significant intercompany transactions and balances have been eliminated.

The Bank, which is the Company’s principal operating subsidiary, was originally incorporated as a Pennsylvania bank on May 11, 2001 and opened its doors on November 6, 2001. It was formed by a group of local business persons and professionals with significant prior experience in community banking in the Lehigh Valley area of Pennsylvania, the Bank’s primary market area.

The accompanying unaudited financial statements have been prepared in accordance with United States of America generally accepted accounting principles (“US GAAP”) for interim financial information and in accordance with instructions for Form 10-Q and Rule 10-01 of the Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

The consolidated financial statements presented in this report should be read in conjunction with the audited consolidated financial statements and the accompanying notes for the year ended December 31, 2020, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 12, 2021.

The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q were issued.

Certain amounts in the 2020 consolidated financial statements may have been reclassified to conform to 2021 presentation. These reclassifications had no effect on 2020 net income.

Note 2 - Summary of Significant Accounting Policies

The significant accounting policies of the Company as applied in the interim financial statements presented herein are substantially the same as those followed on an annual basis as presented in the Company’s Form 10-K for the year ended December 31, 2020.

Note 3 – COVID-19

On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic and on March 13, 2020 the United States government declared COVID-19 as a national emergency. The continuing effects of COVID-19 could adversely impact a broad range of industries in which the Company’s customers operate and impair their ability to fulfill their financial obligations to the Company. The economic effects of COVID-19 may adversely affect the Company’s financial condition and results of operations as further described below. The full future potential impact is unknown at this time.

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Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

During the three months ended March 31, 2021 and the year ended December 31, 2020, the Company provided certain borrowers affected in a variety of ways by COVID-19 with payment accommodations that facilitate their ability to work through the immediate impact of the virus. Payment accommodations were in the form of short-term principal and/or interest deferrals. These payment accommodations were made in accordance with Section 4013 of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. Section 4013 of the CARES Act, enacted on March 27, 2020, provides that, from the period beginning March 1, 2020 until the earlier of December 31, 2020, subsequently extended until December 31, 2021, or the date that is 60 days after the date on which the national emergency concerning the COVID-19 pandemic declared by the President of the United States under the National Emergencies Act terminates, the Company may elect to suspend US GAAP for loan modifications related to the pandemic which would otherwise be categorized as troubled debt restructurings and suspend any determination of a loan modified as a result of the effects of the pandemic as being a troubled debt restructuring, including impairment for accounting purposes. Interest income is continuing to be recognized during the accommodation period. The following table presents COVID-19 CARES Act Section 4013 loans based on loan type, payment accommodation status, and amount at March 31, 2021 and December 31, 2020:

	March 31, 2021
	Number of Loans - Payment Accommodation Period Ended	Number of Loans - Payment Accommodation Period Active	Total Number of Loans		Loan Amount - Payment Accommodation Period Ended		Loan Amount - Payment Accommodation Period Active	Total Loan Amount
	(Dollars In Thousands)
Commercial real estate	128	4	132	$	110,298	$	16,538	$	126,836
Commercial	40	-	40		6,636		-		6,636
Residential real estate	67	-	67		13,708		-		13,708
Consumer	2	-	2		29		-		29
Total	237	4	241	$	130,671	$	16,538	$	147,209
	December 31, 2020
	Number of Loans - Payment Accommodation Period Ended	Number of Loans - Payment Accommodation Period Active	Total Number of Loans		Loan Amount - Payment Accommodation Period Ended		Loan Amount - Payment Accommodation Period Active	Total Loan Amount
	(Dollars In Thousands)
Commercial real estate	130	7	137	$	112,016	$	16,830	$	128,846
Commercial	43	1	44		7,445		752		8,197
Residential real estate	68	4	72		13,517		717		14,234
Consumer	2	-	2		31		-		31
Total	243	12	255	$	133,009	$	18,299	$	151,308

Included in the March 31, 2021 totals above are two hundred thirty-six (236) loans totaling $130.3 million in which the payment accommodation period has ended and the loan payments have resumed under their original contractual terms. Also included in the March 31, 2021 totals above is one (1) consumer loan totaling $418 thousand that, after its payment accommodation period ended in late March 2021, was taken to non-accrual and downgraded to substandard. No loss is anticipated on the loan. Also included in the March 31, 2021 totals above are four (4) commercial loans totaling $16.5 million that are currently under an active fourth short-term (three month) payment accommodation period. Loans in the fourth short-term (three month) payment accommodation period consist of a $11.4 million loan to a borrower in the travel and hotel industry, a $3.8 million loan to a borrower in the assisted living facility industry and two (2) loans totaling $1.4 million to a borrower in the restaurant industry. Except for these four (4) loans being granted a fourth short-term (three month) payment accommodation, between January 1, 2021 and March 31, 2021, there were no new Section 4013 modifications made during the quarter. At March 31, 2021, Management has not changed its classification of these loans due to the knowledge our loan officers have obtained from their discussions with the borrowers and due to the strength of the collateral and guarantors. Management continues to carefully monitor those borrowers who remain on payment deferral for additional signs of

9

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

distress that would result in a downgrade in loan classification. Except for the one (1) consumer loan taken to non-accrual, all loans granted a payment accommodation are considered current for payment status.

At April 30, 2021, the payment accommodation period on the four (4) commercial loans described above has ended and each of the loans have resumed payments under their original contractual terms. At April 30, 2021, the Company had a total of two hundred thirty-six (236) Section 4013 loans totaling $144.7 million, all of which are through the CARES Act Section 4013 payment accommodation period. Included in this total is the one (1) consumer loan described above totaling $418 thousand that was taken to non-accrual and downgraded to substandard in March 2021. Between April 1, 2021 and April 30, 2021, there were no new Section 4013 modifications made.

The Company participates in the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) under the CARES Act and subsequent 2021 Consolidated Appropriations Act (“CAA”). As of March 31, 2021, the Company had a total of three hundred fifty-seven (357) PPP loans outstanding with a receivable balance of $47.7 million, net of $1.4 million of unearned origination fees and costs. At December 31, 2020, the Company had a total of four hundred seventy (470) PPP loans outstanding with a receivable balance of $54.3 million, net of $1.2 million of unearned origination fees and costs. From January 1, 2021 to March 31, 2021, the Company originated two hundred seventy-three (273) new PPP loans with a balance of $28.6 million, net of $1.2 million of unearned origination fees and costs. From January 1, 2021 to March 31, 2021, the Company received forgiveness payments from the SBA on PPP loan principal balances of $36.2 million. As of April 30, 2021, the Company had a total of three hundred fifty-five (355) PPP loans outstanding with a receivable balance of $43.6 million, net of $1.4 million of unearned origination fees and costs. From April 1, 2021 to April 30, 2021, the Company originated forty-eight (48) new PPP loans with a balance of $2.2 million, net of $141 thousand of unearned origination fees and costs. From April 1, 2021 to April 30, 2021, the Company received forgiveness payments from the SBA on PPP loan principal balances of $6.5 million.

These PPP loans are 100% guaranteed by the SBA, have a two year or up to five year maturity and an interest rate of 1% throughout the term of the loan, with payments deferred until forgiveness proceeds received from the SBA or ten months after the end of the covered period. The SBA may forgive the PPP loans if certain conditions are met by the borrower, including using at least 60% of the proceeds for payroll costs. The SBA also provided the Company with a processing fee for each loan, with the amount of such fee pre-determined by the SBA dependent upon the size of each loan. As of March 31, 2021 and December 31, 2020, the Company has net deferred PPP loan fees and costs of $1.4 million and $1.2 million, respectively, which will be recognized through interest income over the life of the related PPP loans. Because of the 100% SBA guarantee, the Company has determined that no allowance for loan losses is required on the PPP loans. All PPP loans have a pass rating and none are past due under their contractual terms.

In April 2020, the Company applied and was approved by the Federal Reserve Board for both the ability to borrow under its Paycheck Protection Program Liquidity Facility (“PPPLF”), as well as its Discount Window. The PPPLF provides term funding to depository institutions that originate loans to small businesses under the PPP. PPP loans that are pledged to secure PPPLF extensions of credit are excluded from leverage ratio calculations. The Company had PPPLF borrowings of $50.8 million at December 31, 2020. As of February 3, 2021, the PPPLF borrowings have been paid off in full. The Company is approved to borrow under the PPPLF through June 30, 2021.

The Company’s allowance for loan losses increased $464 thousand to $11.0 million at March 31, 2021 compared to $10.6 million at December 31, 2020. At March 31, 2021 and December 31, 2020, the allowance for loan losses represented 1.00% and 0.97%, respectively, of total loans receivable (not including PPP loans which are guaranteed by the SBA). During 2020, the Company adjusted the economic risk factor, loan modifications risk factor, and other external factor methodologies to incorporate the current economic implications, unemployment rates and amount of loan modifications due to the COVID-19 pandemic, leading to the increase in the allowance for loan losses as a percentage of non-PPP loans. During the first quarter of 2021, the Company again adjusted the other external factor methodology, leading to a further increase in the allowance for loan losses as a percentage of non-PPP loans. In determining its allowance for loan loss level at March 31, 2021, the Company considered the health and composition of its loan portfolio going into and during the COVID-19 pandemic. All loans that have the CARES Act Section 4013 modification, regardless of whether original contractual payment terms have resumed, are provided additional qualitative reserve in the Company’s allowance for loan loss calculation. The Company’s nonperforming loans to total loans receivable (not including PPP loans) was 0.29% at March 31, 2021, up slightly from 0.25% at March 31, 2020 and 0.26% at December 31, 2020. The Company had $2 thousand in charge-offs for the three months ended March 31, 2021 and no charge-offs for the three months ended March 31, 2020. At March 31, 2021, approximately 95% of the Company’s loan portfolio is collateralized by real estate. Less than 6% of the Company’s loan portfolio is to borrowers in the more particularly hard-hit industries (including the travel and hotel industry, the full-service and limited-service restaurant industries, and the assisted living facilities industry) and the Company has no direct international exposure. The Company was not required to adopt the Current Expected Credit Losses (“CECL”) FASB accounting standard in 2020, as this guidance will not be effective for the Company until 2023. Based upon current economic conditions, the composition of the loan

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Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

portfolio, the perceived credit risk in the portfolio and loan-loss experience of the Company and comparable institutions in the Company’s market area, management feels the allowance is adequate to absorb reasonably anticipated losses.

In response to the COVID-19 outbreak, the Federal Reserve Board in mid-March 2020 has reduced by 150 basis points the benchmark federal funds rate to a target range of 0% to 0.25%, and the yields on 10 year and 30 year Treasury notes have declined to historic lows. As a result of the decline in the Federal Reserve Board’s target federal funds rate and yields on Treasury notes, the Company’s future net interest margin and spread may be further reduced.

Note 4 – Securities Available For Sale

At March 31, 2021 and December 31, 2020, respectively, the amortized cost and approximate fair values of securities available-for-sale were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
March 31, 2021:
U.S. Government agency obligations	$	33,392	$	1	$	(66)	$	33,327
Municipal bonds		43,192		1,286		(233)		44,245
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		512		15		-		527
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		85,840		1,349		(1,204)		85,985
Total	$	162,936	$	2,651	$	(1,503)	$	164,084
December 31, 2020:
U.S. Treasury securities	$	9,998	$	-	$	-	$	9,998
U.S. Government agency obligations		39,059		1		(24)		39,036
Municipal bonds		37,409		1,967		-		39,376
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		512		31		-		543
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		40,244		1,743		-		41,987
Total	$	127,222	$	3,742	$	(24)	$	130,940

The amortized cost and fair value of securities as of March 31, 2021, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without any penalties.

		Amortized		Fair
		Cost		Value
	(In Thousands)
Due in one year or less	$	4,623	$	4,624
Due after one year through five years		30,830		30,771
Due after five years through ten years		8,301		8,632
Due after ten years		32,830		33,545
		76,584		77,572
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - commercial		512		527
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - residential		85,840		85,985
Total	$	162,936	$	164,084

11

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Gross gains of $24 thousand were realized on sales of securities for the three months ended March 31, 2021. There were no gross losses on the sales of securities for the three months ended March 31, 2021. There were no sales of securities for the three months ended March 31, 2020.

Securities with a carrying value of $106.1 million and $98.7 million at March 31, 2021 and December 31, 2020, respectively, were subject to agreements to repurchase, pledged to secure public deposits, or pledged for other purposes required or permitted by law.

The following table shows the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2021 and December 31, 2020, respectively:

		Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2021:	(In Thousands)
U.S. Government agency obligations	$	20,094	$	(66)	$	-	$	-	$	20,094	$	(66)
Municipal bonds		7,117		(233)		-		-		7,117		(233)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
residential		53,169		(1,204)		-		-		53,169		(1,204)
Total Temporarily Impaired Securities	$	80,380	$	(1,503)	$	-	$	-	$	80,380	$	(1,503)
		.
December 31, 2020:
U.S. Government agency obligations	$	31,369	$	(24)	$	-	$	-	$	31,369	$	(24)
Total Temporarily Impaired Securities	$	31,369	$	(24)	$	-	$	-	$	31,369	$	(24)

The Company had twenty-one (21) securities in an unrealized loss position at March 31, 2021 and five (5) securities in an unrealized loss position at December 31, 2020. As of March 31, 2021, the Company either has the intent and ability to hold the securities until maturity or market price recovery or believes that it is more likely than not that it will not be required to sell such securities. Management believes that the unrealized loss only represents temporary impairment of the securities. None of the individual losses are significant.

Note 5 – Restricted Investment in Bank Stock

Restricted investments in bank stock consist of FHLBank of Pittsburgh (“FHLB”) stock and Atlantic Community Bankers Bank (“ACBB”) stock. The restricted stocks are carried at cost. Federal law requires a member institution of the FHLB to hold stock of its district FHLB according to a predetermined formula. The Bank had FHLB stock at a carrying value of $1.3 million as of March 31, 2021 and December 31, 2020. The Bank had ACBB stock at a carrying value of $40 thousand at March 31, 2021 and December 31, 2020.

Management evaluates the FHLB and ACBB restricted stock for impairment. Management’s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) the significance of the decline in net assets of the issuer as compared to the capital stock amount for the issuer and the length of time this situation has persisted, (2) commitments by the issuer to make payments required by law or regulation and the level of such payments in relation to the operating performance of the issuer, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the issuer.

Based upon its evaluation of the foregoing criteria, management believes no impairment charge is necessary related to the FHLB or ACBB stock as of March 31, 2021.

Note 6 – Loans and Credit Quality

The Company has presented PPP loans of $47.7 million at March 31, 2021 and $54.3 million at December 31, 2021, respectively, separately from loans receivable on the Consolidated Balance Sheet. As described in Note 3, PPP loans are 100% SBA guaranteed and

12

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

the Company has determined that no allowance for loan losses is required on PPP loans. All PPP loans are risk rated as pass. PPP loans are not included in the following composition and credit quality tables.

The following table presents the composition of loans receivable at March 31, 2021 and December 31, 2020, respectively:

	March 31, 2021			December 31, 2020
			Percentage of			Percentage of
	Balance		total Loans	Balance		total Loans
		(Dollars in Thousands)
Commercial real estate	$	461,331	41.99%	$	452,251	41.51%
Commercial construction		10,264	0.93%		12,176	1.12%
Commercial		44,650	4.06%		48,114	4.42%
Residential real estate		581,765	52.97%		576,437	52.90%
Consumer		603	0.05%		640	0.05%
Total loans		1,098,613	100.00%		1,089,618	100.00%
Unearned origination fees		178			291
Allowance for loan losses		(11,034)			(10,570)
Net Loans	$	1,087,757		$	1,079,339

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention (potential weaknesses), substandard (well defined weaknesses) and doubtful (full collection unlikely) within the Company's internal risk rating system as of March 31, 2021 and December 31, 2020, respectively:

	Pass		Special Mention		Substandard		Doubtful		Total
March 31, 2021		(In Thousands)
Commercial real estate	$	459,916	$	-	$	1,415	$	-	$	461,331
Commercial construction		9,949		-		315		-		10,264
Commercial		44,650		-		-		-		44,650
Residential real estate		580,267		506		992		-		581,765
Consumer		603		-		-		-		603
Total	$	1,095,385	$	506	$	2,722	$	-	$	1,098,613
December 31, 2020
Commercial real estate	$	450,823	$	-	$	1,428	$	-	$	452,251
Commercial construction		11,861		-		315		-		12,176
Commercial		48,114		-		-		-		48,114
Residential real estate		575,344		512		581		-		576,437
Consumer		640		-		-		-		640
Total	$	1,086,782	$	512	$	2,324	$	-	$	1,089,618

At March 31, 2021, the Company had no foreclosed assets and had $42 thousand in recorded investment in one (1) consumer mortgage loan collateralized by residential real estate in the process of foreclosure. At December 31, 2020 the Company had no foreclosed assets or recorded investment in consumer mortgage loans collateralized by residential real estate in the process of foreclosure.

‎

13

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following table summarizes information in regards to impaired loans by loan portfolio class as of March 31, 2021 and December 31, 2020, respectively:

	March 31, 2021						December 31, 2020
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In Thousands)
With no related allowance recorded:
Commercial real estate	$	840	$	1,080			$	851	$	1,091
Commercial construction		315		315				315		315
Commercial		-		-				-		-
Residential real estate		1,351		1,421				944		1,014
Consumer		-		-				-		-
With an allowance recorded:
Commercial real estate	$	690	$	690	$	15	$	696	$	696	$	21
Commercial construction		-		-		-		-		-		-
Commercial		228		228		22		230		230		23
Residential real estate		596		596		123		604		604		125
Consumer		-		-		-		-		-		-
Total:
Commercial real estate	$	1,530	$	1,770	$	15	$	1,547	$	1,787	$	21
Commercial construction		315		315		-		315		315		-
Commercial		228		228		22		230		230		23
Residential real estate		1,947		2,017		123		1,548		1,618		125
Consumer		-		-		-		-		-		-
	$	4,020	$	4,330	$	160	$	3,640	$	3,950	$	169

‎

14

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables summarize information regarding the average recorded investment and interest income recognized on impaired loans by loan portfolio for the three months ended March 31, 2021 and 2020, respectively:

	Three Months Ended March 31,
	2021				2020
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In Thousands)
With no related allowance recorded:
Commercial real estate	$	846	$	15	$	1,257	$	13
Commercial construction		315		3		315		3
Commercial		-		-		-		-
Residential real estate		1,148		7		619		7
Consumer		-		-		-		-
With an allowance recorded:
Commercial real estate	$	693	$	7	$	350	$	6
Commercial construction		-		-		-		-
Commercial		229		2		234		2
Residential real estate		600		5		720		5
Consumer		-		-		-		-
Total:
Commercial real estate	$	1,539	$	22	$	1,607	$	19
Commercial construction		315		3		315		3
Commercial		229		2		234		2
Residential real estate		1,748		12		1,339		12
Consumer		-		-		-		-
	$	3,831	$	39	$	3,495	$	36

The following table presents non-accrual loans by classes of the loan portfolio:

	March 31, 2021		December 31, 2020
	(In Thousands)
Commercial real estate	$	-	$	-
Commercial construction		-		-
Commercial		-		-
Residential real estate		692		274
Consumer		-		-
Total	$	692	$	274

‎

15

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable 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 past due status as of March 31, 2021 and December 31, 2020, respectively:

					Greater								Loan
					than								Receivables >
	30-59 Days		60-89 Days		90 Days		Total				Total Loan		90 Days and
	Past Due		Past Due		Past Due		Past Due		Current		Receivables		Accruing
March 31, 2021	(In Thousands)
Commercial real estate	$	-	$	-	$	-	$	-	$	461,331	$	461,331	$	-
Commercial construction		-		-		-		-		10,264		10,264		-
Commercial		-		-		-		-		44,650		44,650		-
Residential real estate		74		154		259		487		581,278		581,765		-
Consumer		-		-		-		-		603		603		-
Total	$	74	$	154	$	259	$	487	$	1,098,126	$	1,098,613	$	-
December 31, 2020
Commercial real estate	$	514	$	-	$	-	$	514	$	451,737	$	452,251	$	-
Commercial construction		-		-		-		-		12,176		12,176		-
Commercial		-		-		-		-		48,114		48,114		-
Residential real estate		336		-		42		378		576,059		576,437		-
Consumer		2		-		-		2		638		640		-
Total	$	852	$	-	$	42	$	894	$	1,088,724	$	1,089,618	$	-

The following tables detail the activity in the allowance for loan losses for the three months ended March 31, 2021 and 2020:

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses	(In Thousands)
Three Months Ending March 31, 2021
Beginning Balance - December 31, 2020	$	4,379	$	150	$	848	$	4,485	$	14	$	694	$	10,570
Charge-offs		-		-		-		-		(2)		-		(2)
Recoveries		-		-		-		1		-		-		1
Provisions		308		(37)		68		11		-		115		465
Ending Balance - March 31, 2021	$	4,687	$	113	$	916	$	4,497	$	12	$	809	$	11,034
Three Months Ending March 31, 2020
Beginning Balance - December 31, 2019	$	3,221	$	121	$	770	$	3,488	$	19	$	403	$	8,022
Charge-offs		-		-		-		-		-		-		-
Recoveries		24		-		-		-		-		-		24
Provisions		108		-		47		139		(1)		27		320
Ending Balance - March 31, 2020	$	3,353	$	121	$	817	$	3,627	$	18	$	430	$	8,366

‎

16

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables represent the allocation for loan losses and the related loan portfolio disaggregated based on impairment methodology at March 31, 2021 and December 31, 2020:

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
	(In Thousands)
March 31, 2021
Allowance for Loan Losses
Ending Balance	$	4,687	$	113	$	916	$	4,497	$	12	$	809	$	11,034
Ending balance: individually evaluated for impairment	$	15	$	-	$	22	$	123	$	-	$	-	$	160
Ending balance: collectively evaluated for impairment	$	4,672	$	113	$	894	$	4,374	$	12	$	809	$	10,874
Loans receivables:
Ending balance	$	461,331	$	10,264	$	44,650	$	581,765	$	603			$	1,098,613
Ending balance: individually evaluated for impairment	$	1,530	$	315	$	228	$	1,947	$	-			$	4,020
Ending balance: collectively evaluated for impairment	$	459,801	$	9,949	$	44,422	$	579,818	$	603			$	1,094,593
December 31, 2020
Allowance for Loan Losses
Ending Balance	$	4,379	$	150	$	848	$	4,485	$	14	$	694	$	10,570
Ending balance: individually evaluated for impairment	$	21	$	-	$	23	$	125	$	-	$	-	$	169
Ending balance: collectively evaluated for impairment	$	4,358	$	150	$	825	$	4,360	$	14	$	694	$	10,401
Loans receivables:
Ending balance	$	452,251	$	12,176	$	48,114	$	576,437	$	640			$	1,089,618
Ending balance: individually evaluated for impairment	$	1,547	$	315	$	230	$	1,548	$	-			$	3,640
Ending balance: collectively evaluated for impairment	$	450,704	$	11,861	$	47,884	$	574,889	$	640			$	1,085,978

Troubled Debt Restructurings

The Company may grant a concession or modification for economic or legal reasons related to a borrower’s financial condition that it would not otherwise consider, resulting in a modified loan which is then identified as a troubled debt restructuring (“TDR”). The Company may modify loans through rate reductions, extensions to maturity, interest only payments, or payment modifications to better coincide the timing of payments due under the modified terms with the expected timing of cash flows from the borrowers’ operations. Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. TDRs are considered impaired loans for purposes of calculating the Company’s allowance for loan losses. Payment accommodations completed since the COVID-19 outbreak are reported in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus as described in Note 3 and are not considered a TDR.

The Company identifies loans for potential restructure primarily through direct communication with the borrower and the evaluation of the borrower’s financial statements, revenue projections, tax returns, and credit reports.  Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future.

‎

17

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following table presents TDR’s outstanding:

	Accrual Loans		Non-Accrual Loans		Total Modifications
March 31, 2021	(In Thousands)
Commercial real estate	$	1,113	$	-	$	1,113
Commercial construction		260		-		260
Commercial		228		-		228
Residential real estate		930		14		944
Consumer		-		-		-
	$	2,531	$	14	$	2,545
December 31, 2020
Commercial real estate	$	1,125	$	-	$	1,125
Commercial construction		260		-		260
Commercial		230		-		230
Residential real estate		944		15		959
Consumer		-		-		-
	$	2,559	$	15	$	2,574

As of March 31, 2021, no available commitments were outstanding on TDRs.

There were no newly restructured loans that occurred during the three months ended March 31, 2021 and 2020.

There were no loans that were modified and classified as a TDR within the prior twelve months that experienced a payment default (loans ninety days or more past due) during the three months ended March 31, 2021 and 2020.

Note 7 – Deposits

The components of deposits at March 31, 2021 and December 31, 2020 are as follows:

	March 31,		December 31,
	2021		2020
	(In Thousands)
Demand, non-interest bearing	$	291,411	$	269,996
Demand, NOW and money market, interest bearing		219,254		199,845
Savings		591,176		546,784
Time, $250 and over		78,267		85,272
Time, other		125,500		130,482
Total deposits	$	1,305,608	$	1,232,379

At March 31, 2021, the scheduled maturities of time deposits are as follows (in thousands):

2021 (remainder of the year)	$	111,820
2022		50,680
2023		33,776
2024		5,647
2025		1,258
2026		586
	$	203,767

18

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Note 8 – Short-term and Long-term Borrowings

Securities sold under agreements to repurchase, federal funds purchased, and FHLB short term advances generally represent overnight or less than twelve month borrowings. Long term advances from the FHLB are for periods of twelve months or more and are generally less than sixty months. The Bank has an agreement with the FHLB, which allows for borrowings up to a percentage of qualifying assets. At March 31, 2021, the Bank had a maximum borrowing capacity for short-term and long-term advances of approximately $693.6 million. This borrowing capacity with the FHLB includes a line of credit of $150.0 million. There were no short-term FHLB advances outstanding as of March 31, 2021 and December 31, 2020. There were $14.7 million in long-term FHLB advances outstanding as of March 31, 2021 and December 31, 2020. All FHLB borrowings are secured by qualifying assets of the Bank.

The components of long-term borrowings with the FHLB were as follows:

	March 31, 2021
	(Dollars in Thousands)
Maturity Date	Interest Rate		Outstanding
March 2022	0.79%	$	10,000
March 2022	0.64%		2,663
March 2022	0.61%		1,988
Total FHLB Outstanding Borrowings		$	14,651

The Bank has a federal funds line of credit with the ACBB of $10.0 million, of which none was outstanding at March 31, 2021 and December 31, 2020. Advances from this line are unsecured.

As described in Note 3, the Bank had no long-term PPPLF borrowings through the Federal Reserve Bank of Philadelphia as of March 31, 2021 and had $50.8 million, at an interest rate of 0.35%, as of December 31, 2020. All PPPLF borrowings were secured by PPP loans.

Note 9 – Stock Incentive Plan and Employee Stock Purchase Plan

Stock Incentive Plan:

The Company maintains the Embassy Bancorp, Inc. Stock Incentive Plan (the “SIP”), originally adopted by the Company’s shareholders effective June 16, 2010 and subsequently amended, restated, and approved on June 20, 2019. The SIP authorizes the Board of Directors, or a committee authorized by the Board of Directors, to award a stock based incentive to (i) designated officers (including officers who are directors) and other designated employees at the Company and its subsidiaries, and (ii) non-employee members of the Board of Directors and advisors and consultants to the Company and its subsidiaries. The SIP provides for stock based incentives in the form of incentive stock options as provided in Section 422 of the Internal Revenue Code of 1986, non-qualified stock options, stock appreciation rights, restricted stock and deferred stock awards. The term of the option, the amount of time for the option to vest after grant, if any, and other terms and limitations will be determined at the time of grant. Options granted under the SIP may not have an exercise period that is more than ten years from the time the option is granted. The maximum number of shares of common stock authorized for issuance under the SIP is 756,356. The SIP provides for appropriate adjustments in the number and kind of shares available for grant or subject to outstanding awards under the SIP to avoid dilution in the event of a merger, stock splits, stock dividends or other changes in the capitalization of the Company. The SIP expires on June 20, 2029. At March 31, 2021, there were 440,805 shares available for issuance under the SIP.

The Company grants shares of restricted stock, under the SIP, to certain members of its Board of Directors as compensation for their services, in accordance with the Company’s Non-employee Directors Compensation program adopted in October 2010. The Company also grants restricted stock to certain officers under individual agreements with these officers. Some of these restricted stock awards vest immediately, while the remainder vest over the service period of three years to nine years. Management recognizes compensation expense for the fair value of the restricted stock awards on a straight-line basis over the requisite service period. Since inception of the plan and through the period ended March 31, 2021, there have been 199,308 awards granted. During the three months ended March 31, 2021 and 2020 there were 12,009 and 32,210 awards granted, respectively. During the three months ended March 31, 2021 and 2020 the Company recognized $246 thousand and $192 thousand in compensation expense for the restricted stock awards, respectively.

19

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Historically, the Company has granted stock options to purchase shares of stock to certain executive officers under individual agreements and/or in accordance with their respective employment agreements. There were no stock options granted for the three months ended March 31, 2021 and 2020, respectively. At March 31, 2021 there was no unrecognized cost remaining for these unexercised options and all outstanding options are fully vested.

Employee Stock Purchase Plan:

On January 1, 2017, the Company implemented the Embassy Bancorp, Inc. Employee Stock Purchase Plan (“ESPP”), which was approved by the Company’s shareholders at the annual meeting held on June 16, 2016. Under the ESPP, each employee of the Company and its subsidiaries who is employed on an offering date and customarily is scheduled to work at least twenty (20) hours per week and more than five (5) months in a calendar year is eligible to participate. The purchase price for shares purchased under the ESPP shall initially equal 95% of the fair market value of such shares on the date of purchase.  The purchase price may be adjusted from time to time by the Board of Directors; provided, however, that the discount to fair market value shall not exceed 15%.  The Company has authorized 350,000 shares of its common stock for the ESPP, of which 16,068 shares have been issued as of March 31, 2021. The Company recognized discount expense in relation to the ESPP of $1 thousand for the three months ended March 31, 2021 and 2020, respectively.

Note 10 – Other Comprehensive (Loss) Income

US GAAP requires that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

The components of other comprehensive (loss) income both before tax and net of tax are as follows:

	Three Months Ended March 31,
	2021						2020
	(In Thousands)
	Before		Tax		Net of		Before		Tax		Net of
	Tax		Effect		Tax		Tax		Effect		Tax
Change in accumulated other comprehensive (loss) income:
Unrealized holding (losses) gains on securities ‎   available for sale	$	(2,546)	$	535	$	(2,011)	$	1,803	$	(378)	$	1,425
Reclassification adjustments for gains on securities ‎   transactions included in net income (A),(B)		(24)		5		(19)		-		-		-
Total other comprehensive (loss) income	$	(2,570)	$	540	$	(2,030)	$	1,803	$	(378)	$	1,425

A.Realized gains on securities transactions included in gain on sales of securities in the accompanying Consolidated Statements of Income.

B.Tax effect included in income tax expense in the accompanying Consolidated Statements of Income.

A summary of the realized gains on securities available for sale for the three months ended March 31, 2021 and 2020, net of tax, is as follows:

	Three Months Ended
	March 31,
		2021		2020
		(In Thousands)
Securities available for sale:
Realized gains on securities transactions	$	(24)	$	-
Income taxes		5		-
Net of tax	$	(19)	$	-

‎

20

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

A summary of the accumulated other comprehensive income net of tax, is as follows:

	Securities
	Available
	for Sale
Three Months Ended March 31, 2021 and 2020	(In Thousands)
Balance January 1, 2021	$	2,937
Other comprehensive loss before reclassifications		(2,011)
Amounts reclassified from accumulated other ‎   comprehensive income		(19)
Net other comprehensive loss during the period		(2,030)
Balance March 31, 2021	$	907
Balance January 1, 2020	$	1,340
Other comprehensive income before reclassifications		1,425
Amounts reclassified from accumulated other ‎   comprehensive income		-
Net other comprehensive income during the period		1,425
Balance March 31, 2020	$	2,765

Note 11 – Basic and Diluted Earnings per Share

Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the period, as adjusted for stock dividends and splits. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustments to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method.

	Three Months Ended
	March 31,
	2021		2020
	(Dollars In Thousands, Except Share and Per Share Data)
Net income	$	4,044	$	2,457
Weighted average shares outstanding		7,532,246		7,443,875
Dilutive effect of potential common shares, stock options		33,235		37,630
Diluted weighted average common shares outstanding		7,565,481		7,481,505
Basic earnings per share	$	0.54	$	0.33
Diluted earnings per share	$	0.53	$	0.33

There were no stock options not considered in computing diluted earnings per common share for the three months ended March 31, 2021. Stock options of 4,227 were not considered in computing diluted earnings per common share for the three months ended March 31, 2020 because to do so would have been anti-dilutive.

Note 12 – Fair Value Measurements

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

21

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

US GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy utilized at March 31, 2021 and December 31, 2020, respectively, are as follows:

		(Level 1)		(Level 2)
		Quoted		Significant		(Level 3)
		Prices in Active		Other		Significant
		Markets for		Observable		Unobservable
Description	Identical Assets		Inputs		Inputs		Total
		(In Thousands)
U.S. Government agency obligations	$	-	$	33,327	$	-	$	33,327
Municipal bonds		-		44,245		-		44,245
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		527		-		527
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		85,985		-		85,985
March 31, 2021 Securities available for sale	$	-	$	164,084	$	-	$	164,084
U.S. Treasury securities	$	-	$	9,998	$	-	$	9,998
U.S. Government agency obligations		-		39,036		-		39,036
Municipal bonds		-		39,376		-		39,376
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		543		-		543
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		41,987		-		41,987
December 31, 2020 Securities available for sale	$	-	$	130,940	$	-	$	130,940

The fair value of securities available for sale are determined by matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted prices. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer

22

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the security’s terms and conditions, among other things.

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2021 and December 31, 2020, respectively, are as follows:

		(Level 1)		(Level 2)
		Quoted		Significant		(Level 3)
		Prices in Active		Other		Significant
		Markets for		Observable		Unobservable
Description	Identical Assets		Inputs		Inputs		Total
		(In Thousands)
March 31, 2021 Impaired loans	$	-	$	-	$	1,354	$	1,354
December 31, 2020 Impaired loans	$	-	$	-	$	1,361	$	1,361

Impaired loans are those that are accounted for under existing FASB guidance, in which the Bank has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. Fair values may also include qualitative adjustments by management based on economic conditions and liquidation expenses. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

At March 31, 2021, of the impaired loans having an aggregate balance of $4.0 million, $2.5 million did not require a valuation allowance because the value of the collateral, including estimated selling costs, securing the loan was determined to meet or exceed the balance owed on the loan. Of the remaining $1.5 million in impaired loans, an aggregate valuation allowance of $160 thousand was required to reflect what was determined to be a shortfall in the value of the collateral as compared to the balance on such loans.

Real estate properties acquired through, or in lieu of, foreclosure are to be sold and are carried at fair value less estimated cost to sell. Fair value is based upon independent market prices or appraised value of the property. These assets would be included in Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement. At March 31, 2021 and December 31, 2020, respectively, the Company had no real estate properties acquired through, or in lieu of, foreclosure.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Quantitative Information about Level 3 Fair Value Measurements
Description	Fair Value ‎Estimate		Valuation Techniques	Unobservable Input	Range ‎(Weighted Average)
		(Dollars In Thousands)
March 31, 2021:
Impaired loans	$	1,354	Appraisal of collateral and	Appraisal adjustments (1)	0% to -25% (-15.1%)
			pending agreement of sale	Liquidation expenses (2)	0% to -10.0% (-8.5%)
December 31, 2020:
Impaired loans	$	1,361	Appraisal of collateral and	Appraisal adjustments (1)	0% to -25% (-15.1%)
			pending agreement of sale	Liquidation expenses (2)	0% to -10.0% (-8.5%)

1.Appraisals may be adjusted by management for qualitative factors including economic conditions and the age of the appraisal. The range and weighted average of appraisal adjustments are presented as a percent of the appraisal.

2.Appraisals and pending agreements of sale are adjusted by management for liquidation expenses. The range and weighted average of liquidation expense adjustments are presented as a percent of the appraisal or pending agreement of sale.

‎

23

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The estimated fair values of the Company’s financial instruments were as follows at March 31, 2021 and December 31, 2020:

						(Level 1)
						Quoted		(Level 2)
						Prices in		Significant		(Level 3)
						Active		Other		Significant
		Carrying		Fair Value		Markets for		Observable		Unobservable
		Amount		Estimate		Identical Assets		Inputs		Inputs
	(In Thousands)
March 31, 2021:
Financial assets:
Cash and cash equivalents	$	120,114	$	120,114	$	120,114	$	-	$	-
Securities available-for-sale		164,084		164,084		-		164,084		-
Loans receivable, net of allowance		1,087,756		1,139,248		-		-		1,139,248
Paycheck Protection Program loans receivable		47,714		47,938		-		-		47,938
Restricted investments in bank stock		1,330		1,330		-		1,330		-
Accrued interest receivable		3,114		3,114		-		3,114		-
Financial liabilities:
Deposits		1,305,608		1,308,187		-		1,308,187		-
Securities sold under agreements to
repurchase and federal funds purchased		9,594		9,594		-		9,594		-
Long-term borrowings		14,651		14,694		-		-		14,694
Accrued interest payable		1,069		1,069		-		1,069		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-
December 31, 2020:
Financial assets:
Cash and cash equivalents	$	131,907	$	131,907	$	131,907	$	-	$	-
Securities available-for-sale		130,940		130,940		-		13,940		-
Loans receivable, net of allowance		1,079,339		1,158,545		-		-		1,158,545
Paycheck Protection Program loans receivable		54,334		54,632				-		54,632
Restricted investments in bank stock		1,330		1,330		-		1,330		-
Accrued interest receivable		3,136		3,136		-		3,136		-
Financial liabilities:
Deposits		1,232,379		1,235,483		-		1,235,483		-
Securities sold under agreements to
repurchase and federal funds purchased		13,612		13,612		-		13,612		-
Long-term borrowings		14,651		14,707		-		-		14,707
Paycheck Protection Program
Liquidity Facility		50,794		50,810				-		50,810
Accrued interest payable		1,640		1,640		-		1,640		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-

‎

24

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Note 13 – Future Accounting Standards

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses”. ASU 2016-13 requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In November 2019, the FASB issued an update to defer the implementation date for smaller reporting companies from 2020 to 2023. The Company currently qualifies as a smaller reporting company under SEC Regulation S-K and, therefore, the guidance is effective for the Company in 2023. The Company has not yet determined the impact this standard will have on its consolidated financial statements or its results of operations.

25

 Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis provides an overview of the financial condition and results of operations of Embassy Bancorp, Inc. (the “Company”) as of March 31, 2021 and for the three months ended March 31, 2021 and 2020, respectively. This discussion should be read in conjunction with the preceding consolidated financial statements and related footnotes, as well as with the audited consolidated financial statements and the accompanying notes for the year ended December 31, 2020 included in the Company’s Form 10-K filed with the Securities and Exchange Commission. Current performance does not guarantee and may not be indicative of similar performance in the future.

Critical Accounting Policies

Disclosure of the Company’s significant accounting policies is included in Note 1 to the consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2020. Some of these policies are particularly sensitive, requiring significant judgments, estimates and assumptions to be made by management, most particularly in connection with determining the provision for loan losses and the appropriate level of the allowance for loan losses and the valuation of deferred tax assets. Additional information is contained in this Form 10-Q under the paragraphs titled “Provision for Loan Losses,” “Credit Risk and Loan Quality,” and “Income Taxes” contained on the following pages.

Caution About Forward-looking Statements

This report contains forward-looking statements, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies and regarding general economic conditions. These forward-looking statements are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors and other conditions that, by their nature, are not susceptible to accurate forecast, and are subject to significant uncertainty.

Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “intends”, “will”, “should”, “anticipates”, or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy.

No assurance can be given that the future results covered by forward-looking statements will be achieved. Such statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could impact the Company’s operating results include, but are not limited to, (i) the effects of changing economic conditions in the Company’s market areas and nationally, (ii) credit risks of commercial, real estate, consumer and other lending activities, (iii) significant changes in interest rates, (iv) changes in federal and state banking laws and regulations which could impact the Company’s operations, (v) changes in accounting policies or procedures as may be required by FASB or regulatory agencies, (vi) risks and uncertainties related to the COVID-19 pandemic and resulting governmental and societal responses, and (vii) other external developments which could materially affect the Company’s business and operations, as well as the risks described in the Company’s Form 10-K for the year ended December 31, 2020 and subsequent filings with the SEC.

OVERVIEW

The Company is a Pennsylvania corporation organized in 2008 and registered as a bank holding company pursuant to the Bank Holding Company Act of 1956, as amended (the “BHC Act”). The Company was formed for purposes of acquiring Embassy Bank For The Lehigh Valley (the “Bank”) in connection with the reorganization of the Bank into a bank holding company structure, which was consummated on November 11, 2008. Accordingly, the Company owns all of the capital stock of the Bank, giving the organization more flexibility in meeting its capital needs as the Company continues to grow. Embassy Holdings, LLC (the “LLC”) is a wholly-owned subsidiary of the Bank organized to engage in the holding of property acquired by the Bank in satisfaction of debts previously contracted. As such, the consolidated financial statements contained herein include the accounts of the Company, the Bank and the LLC.

The Bank, which is the Company’s primary operating subsidiary, was originally incorporated as a Pennsylvania bank on May 11, 2001 and opened its doors on November 6, 2001. It was formed by a group of local business persons and professionals with significant prior experience in community banking in the Lehigh Valley area of Pennsylvania, the Bank’s primary market area, for the purpose of providing a local community bank to serve Lehigh and Northampton Counties in Pennsylvania.

Since its inception, the Board’s philosophy has been that, by running the Bank with a view toward the long term, only good things will happen for the Bank’s customers, team members, shareholders and the Lehigh Valley community.

26

At March 31, 2021, the Company continued to be in strong financial and operational condition. The Bank’s March 31, 2021 capital ratios exceeded the amounts required to be considered “well capitalized” as defined in applicable banking regulations. The Company’s ratio of non-performing loans to total loans (not including PPP loans) at March 31, 2021 was 0.29% and the ratio of non-performing assets to total assets was 0.22%. Management believes the Company is well prepared for the ongoing economic and social consequences of the COVID-19 global pandemic.

The Company’s assets increased $23.6 million from $1.4 billion at December 31, 2020 to $1.5 billion at March 31, 2021. The increase was due to an increase of $33.1 million in securities available for sale and an increase of $8.4 million in net loans receivable (not including PPP loans); offset by a decrease of $11.8 million in cash and cash equivalents and a decrease of $6.6 million in net PPP loans receivable due to net loan forgiveness. The growth in securities available for sale and net loans receivable was primarily funded by deposits. The decrease in cash and cash equivalents was primarily due to PPPLF borrowings of $50.8 million being paid off in full during the first quarter of 2021 and purchases of available for sale securities, offset in part by an increase in deposits. The Company's deposits grew $73.2 million from $1.2 billion at December 31, 2020 to $1.3 billion at March 31, 2021. The overall deposit growth was due to a highly effective relationship building, sales and marketing effort, which served to further increase the Company’s overall presence in the market it serves, along with deposit relationships developed as a result of cross-marketing efforts to its loan and other non-depository banking service customers. Also contributing to the increase is the increased usage of the Company’s online banking platform, competitive offered rates, the opening of a permanent branch office in Macungie, the continued convenience and efficiency of our branch network and branch personnel, and the injection of federal stimulus money into the economy from PPP funds and consumer stimulus payments. The Company also continues to capitalize on opportunities created by recent merger announcements, name changes, and competitive branch hour adjustments and/or closures in the Company’s market area, attracting customers looking to relocate to a local, reputable community bank.

Net loans receivable (not including PPP loans) increased by $8.4 million to $1.09 billion at March 31, 2021 from $1.08 billion at December 31, 2020. The market continues to be very competitive and the Company’s commitment to maintaining a high-quality portfolio that returns a reasonable market rate. While the past and current economic and competitive conditions in the marketplace have created more competition for loans to credit-worthy customers, the Company continues to expand its market presence and continues to focus on developing a reputation as being a market leader in both commercial and consumer/mortgage lending. Management believes that this combination of relationship building, cross marketing and responsible underwriting will translate into continued long-term growth of a portfolio of quality loans and core deposit relationships, although there can be no assurance of this. The Company continues to monitor interest rate exposure of its interest-bearing assets and liabilities and believes that it is well positioned for any anticipated future market rate adjustments.

Net income for the three months ended March 31, 2021 was $4.0 million compared to net income for the three months ended March 31, 2020 of $2.5 million, an increase of $1.6 million, or 64.6%. Basic and diluted earnings per share increased to $0.54 and $0.53 for the three months ended March 31, 2021, as compared to $0.33, respectively, for the three months ended March 31, 2020. The difference in net income for the three months ended March 31, 2021 and March 31, 2020 resulted from increases in net interest income and non-interest income; offset, in part, by an increase in the provision for loan losses. The increase in the provision for loan losses for the three months ended March 31, 2021 was primarily a result of continued provisioning in accordance with the allowance for loan loss methodology due to the COVID-19 pandemic and, to a lesser extent, ongoing loan growth.

RESULTS OF OPERATIONS

Net Interest Income

Generally, changes in net interest income are measured by net interest rate spread and net interest margin. Interest rate spread is the mathematical difference between the average interest earned on earning assets and interest paid on interest bearing liabilities. Interest margin represents the net interest yield on earning assets. The interest margin gives a reader a better indication of asset earning results when compared to peer groups or industry standards.

The Company determines interest rate spread and margin on both a US GAAP and tax equivalent basis. The use of tax equivalent basis in determining interest rate spread and margin is considered a non-US GAAP measure. The Company believes use of this measure provides meaningful information to the reader of the consolidated financial statements when comparing taxable and non-taxable assets. However, it is supplemental to US GAAP which is used to prepare the Company’s consolidated financial statements and should not be read in isolation or relied upon as a substitute for US GAAP measures. In addition, the non-US GAAP measure may not be comparable to non-US GAAP measures reported by other companies. The tax rate used to calculate the tax equivalent adjustments was 21% for 2021 and 2020.

Total interest income for the three months ended March 31, 2021 increased $934 thousand to $11.8 million, as compared to $10.9 million for the three months ended March 31, 2020. Average earning assets were $1.4 billion for the three months ended March 31, 2021 as compared to $1.1 billion for the three months ended March 31, 2020. The tax equivalent yield on average earning assets was 3.48% for the first quarter of 2021 compared to 3.88% for the first quarter of 2020.

27

Total interest expense for the three months ended March 31, 2021 decreased $927 thousand to $1.1 million, as compared to $2.1 million for the three months ended March 31, 2020. Average interest bearing liabilities were $1.0 billion for the three months ended March 31, 2021 as compared to $877.2 million for the three months ended March 31, 2020. The yield on average interest bearing liabilities was 0.45% and 0.95% for the first quarter of 2021 and 2020, respectively.

Net interest income for the three months ended March 31, 2021 was $10.7 million compared to $8.8 million for the three months ended March 31, 2020. The improvement in net interest income is primarily the result of an increase in the interest and fee income from PPP loans, a decrease in the balance and rates of certificates of deposit, and a decrease in the rates of interest bearing demand deposits, NOW, money market, savings, securities sold under agreement to repurchase and other borrowings. Also contributing to the improvement in net interest income for the three months ended March 31, 2021 was an increase in the balances of taxable loans, taxable and non-taxable investments, federal funds sold, and interest bearing deposits with banks. The improvements were offset, in part, by a decrease in the rates of taxable and non-taxable loans, taxable and non-taxable investments, fed funds sold and interest bearing deposits with banks, an increase in the balance of interest bearing demand deposits, NOW, money markets, savings, securities sold under agreement to repurchase, and interest expense from PPPLF borrowings. The Company’s net interest margin increased slightly on a US GAAP basis and remained flat at a non-US GAAP basis. The Company’s net interest margin is 3.13% on a US GAAP basis and 3.15% on a non-US GAAP basis for the three months ended March 31, 2021, as compared to 3.12% on a US GAAP basis and 3.15% on a non-US GAAP basis for the three months ended March 31, 2020.

In response to the COVID-19 outbreak, the Federal Reserve Board in mid-March 2020 reduced by 150 basis points the benchmark fed funds rate to a target range of 0% to 0.25%, and the yields on 10 and 30 year Treasury notes had declined to historic lows. Less than 10% of the Company’s loan portfolio is scheduled to mature or reprice within the next year. As a result of the decline in the Federal Reserve Board’s target federal funds rate and yields on Treasury notes, the Company’s future net interest margin and spread may be further reduced. The Company’s net interest margin was also affected by the PPP loans, which bear interest at a rate of 1.0%, and PPPLF borrowings, which bore an interest rate of 0.35% and were paid off in early February 2021. The net interest margin on a non-US GAAP basis excluding PPP loans and PPP interest income and PPPLF borrowings interest expense for the three months ended March 31, 2021 was 2.93%.

‎

28

The table below sets forth average balances and corresponding yields for the corresponding periods ended March 31, 2021 and 2020, respectively:

Distribution of Assets, Liabilities and Stockholders’ Equity:

Interest Rates and Interest Differential (quarter to date)

	Three Months Ended March 31,
	2021					2020
					Tax					Tax
	Average				Equivalent	Average				Equivalent
	Balance			Interest	Yield	Balance			Interest	Yield
		(Dollars In Thousands)
ASSETS
Loans - taxable (2)	$	1,092,019	$	10,080	3.74%	$	1,016,177	$	10,133	4.01%
Loans - Paycheck Protection Program		51,469		1,100	8.67%		-		-	0.00%
Loans - non-taxable (1)		6,404		48	3.85%		7,365		57	3.94%
Investment securities - taxable		105,806		326	1.25%		63,649		377	2.38%
Investment securities - non-taxable (1)		30,009		206	3.52%		25,150		212	4.29%
Federal funds sold		1,000		-	0.00%		533		1	1.02%
Interest bearing deposits with banks		94,943		29	0.12%		20,247		75	1.49%
TOTAL INTEREST EARNING ASSETS		1,381,650		11,789	3.48%		1,133,121		10,855	3.88%
Less allowance for loan losses		(10,730)					(8,080)
Other assets		60,591					50,780
TOTAL ASSETS	$	1,431,511				$	1,175,821
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing demand deposits, ‎   NOW and money market	$	203,400	$	32	0.06%	$	181,871	$	261	0.58%
Savings		565,814		396	0.28%		426,511		444	0.42%
Certificates of deposit		210,608		665	1.28%		245,617		1,290	2.11%
Securities sold under agreements to repurchase ‎and other borrowings		27,397		29	0.43%		23,220		69	1.20%
Paycheck Protection Program Liquidity
Facility borrowings		17,261		15	0.35%		-		-	0.00%
TOTAL INTEREST BEARING LIABILITIES		1,024,480		1,137	0.45%		877,219		2,064	0.95%
Non-interest bearing demand deposits		272,323					178,293
Other liabilities		20,112					18,981
Stockholders' equity		114,596					101,328
TOTAL LIABILITIES AND ‎STOCKHOLDERS' EQUITY	$	1,431,511				$	1,175,821
Net interest income			$	10,652				$	8,791
Tax equivalent adjustments
Loans				13					15
Investments				55					56
Total tax equivalent adjustments				68					71
Net interest income on a tax equivalent basis			$	10,720				$	8,862
Net interest spread (US GAAP basis)					3.01%					2.91%
Net interest margin (US GAAP basis)					3.13%					3.12%
Net interest spread (non-US GAAP basis) (3)					3.03%					2.93%
Net interest margin (non-US GAAP basis) (3)					3.15%					3.15%

(1)Yields on tax exempt assets have been calculated on a fully tax equivalent basis at a tax rate of 21% as of March 31, 2021 and 2020, respectively.

(2)The average balance of taxable loans includes loans in which interest is no longer accruing.

(3)Non-US GAAP net interest spread and net interest margin calculated on a fully tax equivalent basis at a tax rate of 21% as of March 31, 2021 and 2020, respectively.

29

The table below demonstrates the relative impact on net interest income of changes in the volume of interest-earning assets and interest-bearing liabilities and changes in rates earned and paid by the Company on such assets and liabilities:

	Three Months Ended
	March 31, 2021 compared to March 31, 2020
	(In Thousands)
			Due to change in:
	Total						# of
	Change		Volume		Rate		Days
Interest-earning assets:
Loans - taxable	$	(53)	$	756	$	(725)	$	(84)
Loans - Paycheck Protection Program		1,100		1,100		-		-
Loans - non-taxable		(9)		(8)		(1)		-
Investment securities - taxable		(51)		250		(298)		(3)
Investment securities - non-taxable		(6)		41		(45)		(2)
Federal funds sold		(1)		1		(2)		-
Interest bearing deposits with banks		(46)		277		(323)		-
Total net change in income on
interest-earning assets		934		2,417		(1,394)		(89)
Interest-bearing liabilities:
Interest bearing demand deposits,
NOW and money market		(229)		31		(260)		-
Savings		(48)		145		(190)		(3)
Certificates of deposit		(625)		(184)		(436)		(5)
Total deposits		(902)		(8)		(886)		(8)
Securities sold under agreements to
repurchase and other borrowings		(40)		12		(52)		-
Paycheck Protection Program
Liquidity Facility borrowings		15		15		-		-
Total net change in expense on
interest-bearing liabilities		(927)		19		(938)		(8)
Change in net interest income	$	1,861	$	2,398	$	(456)	$	(81)

Provision for Loan Losses

The allowance for loan losses is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is maintained at a level management considers to be adequate to provide for losses that can be reasonably anticipated. Management’s periodic evaluation of the adequacy of the allowance is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant change.

The allowance consists of general, specific, qualitative and unallocated components. The general component covers non-classified loans and classified loans not considered impaired, and is based on historical loss experience adjusted for qualitative factors. The specific component relates to loans that are classified as impaired and/or restructured. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying

30

assumptions used in the methodologies for estimating specific and general losses in the portfolio. An allowance for loan losses is not maintained on loans designated as held for sale.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. 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. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral-dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and home equity loans for impairment disclosures, unless such loans are the subject of a restructuring agreement or there is a possible loss expected.

For the three months ended March 31, 2021, the provision for loan losses was $465 thousand, as compared to $320 thousand for the same period ended March 31, 2020. In the three months ended March 31, 2021 there were $2 thousand in charge-offs and $1 thousand in recoveries, as compared to no charge-offs and $24 thousand in recoveries for the three months ended March 31, 2020. The provision for loan losses is a function of the allowance for loan loss methodology that the Company uses to determine the appropriate level of the allowance for inherent loan losses after net charge-offs have been deducted. During 2020 and in the first quarter of 2021, the Company adjusted the economic risk factor, loan modifications risk factor, and other external factor methodologies to incorporate the current economic implications, unemployment rates and amount of loan modifications due to the COVID-19 pandemic. See further discussion following in the “Credit Risk and Loan Quality” section of the Company’s considerations of its March 31, 2021 allowance for loan loss levels. The allowance for loan losses is $11.0 million as of March 31, 2021, which is 1.00% of outstanding loans receivable (not including PPP loans), compared to $8.4 million or 0.81% of outstanding loans as of March 31, 2020. At December 31, 2020, the allowance for loan losses was $10.6 million, which represented 0.97% of total outstanding loans. Based principally on economic conditions, asset quality, and loan-loss experience, including that of comparable institutions in the Company’s market area, the allowance is believed to be adequate to absorb any losses inherent in the portfolio. Because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate, or that material increases will not be necessary should the quality of the loans deteriorate. The Company has not participated in any sub-prime lending activity.

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The activity in the allowance for loan losses is shown in the following table, as well as period end loans receivable and the allowance for loan losses as a percent of the total loans receivable (not including PPP loans) portfolio:

	Three Months Ended
	March 31,
	2021		2020
	(In Thousands)
Loans receivable at end of period	$	1,098,613	$	1,031,691
Allowance for loan losses:
Balance, beginning	$	10,570	$	8,022
Provision for loan losses		465		320
Loans charged off:
Commercial real estate		-		-
Commercial construction		-		-
Commercial		-		-
Residential real estate		-		-
Consumer		(2)		-
Total loans charged off		(2)		-
Recoveries of loans previously charged off:
Commercial real estate		-		24
Commercial construction		-		-
Commercial		-		-
Residential real estate		1		-
Consumer		-		-
Total recoveries		1		24
Net charge offs		(1)		24
Balance at end of period	$	11,034	$	8,366
Allowance for loan losses to loans receivable at end of period		1.00%		0.81%

Non-interest Income

Total non-interest income was $532 thousand for the three months ended March 31, 2021 compared to $300 thousand for the same period in 2020. The increase is attributable to an increase in debit card interchange fees of $52 thousand, an increase in bank owned life insurance of $175 thousand, and the gain on the sale of securities of $24 thousand. The increase in the bank owned life insurance was driven by the effect market conditions had on underlying life insurance assets in March 2020 due to the onset of the pandemic, as well as the purchase of $4.0 million in bank owned life insurance in the fourth quarter of 2020.

Non-interest Expense

Non-interest expenses remained relatively flat at $5.7 million for the three months ended March 31, 2021, with a slight decrease of $47 thousand from the three months ended March 31, 2020. The decrease in non-interest expenses is primarily due to a decrease of $110 thousand in advertising and promotions from shifts in marketing strategies and less promotions and public relations expense, and a decrease of $95 thousand in charitable contributions due to EITC contributions in the first quarter of 2020, not yet contributed in 2021. Offsetting these decreases were an increase of $45 thousand in salaries and employee benefits, in part, due to annual increases in salaries and benefits and increase in health insurance cost; offset by an increase in deferred compensation costs primarily associated with PPP loan originations. Additional increases in non-interest expenses are attributable to an increase of $61 thousand in occupancy and equipment due in part to the opening of the Macungie permanent branch and rent associated with the Company’s proposed new branch office at 2002 West Liberty Street in Allentown, Pennsylvania (regulatory approval obtained in March 2021), along with an increase in building repair and maintenance, an increase of $30 thousand in data processing due primarily to e-commerce and the expanding customer base, and an increase of $72 thousand in FDIC insurance due, in part, to FDIC credits applied in the first quarter of 2020.

A breakdown of other expenses can be found in the Consolidated Statements of Income.

Income Taxes

The provision for income taxes for the three months ended March 31, 2021 totaled $1.0 million, or 19.7% of income before taxes, compared to income taxes for the three months ended March 31, 2020 totaling $582 thousand, or 19.2% of income before taxes. The

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increase in the tax rate is, in part, the result of change in the mix of taxable and tax free loans and investments; offset by the increase in income on bank owned life insurance.

FINANCIAL CONDITION

Securities

The Company’s securities portfolio continues to be classified, in its entirety, as “available for sale.” Management believes that a portfolio classification of available for sale allows complete flexibility in the investment portfolio. Using this classification, the Company intends to hold these securities for an indefinite amount of time, but not necessarily to maturity. Such securities are carried at fair value with unrealized gains or losses reported as a separate component of stockholders’ equity. The portfolio is structured to provide maximum return on investments while providing a consistent source of liquidity and meeting strict risk standards. Investment securities consist primarily of mortgage-backed securities issued by FHLMC or FNMA, taxable and non-taxable municipal bonds, and government agency bonds. The Company holds no high-risk securities or derivatives as of March 31, 2021. The Company has not made any investments in non-U.S. government agency mortgage backed securities or sub-prime loans.

Total securities at March 31, 2021 were $164.1 million compared to $130.9 million at December 31, 2020. The increase in the investment portfolio resulted from the purchase of eight (8) mortgage-backed securities, two (2) tax-free municipal bonds, and two (2) taxable municipal bonds totaling $57.5 million, and the purchase of four (4) tax-free municipal bonds unsettled at March 31, 2021 totaling $3.0 million; offset by principal pay downs on mortgage-backed securities, calls of one (1) non-taxable municipal bonds, the maturity of two (2) government agency bond, and maturity of one (1) Treasury security totaling $21.4 million, the sale of two (2) mortgage backed securities totaling $3.3 million, including a realized gain of $24 thousand, and a decrease in unrealized gains of $2.6 million. The carrying value of the securities portfolio as of March 31, 2021 includes a net unrealized gain of $1.1 million, which is recorded as accumulated other comprehensive income in stockholders’ equity net of income tax effect. This compares to a net unrealized gain of $3.7 million at December 31, 2020. The current unrealized gain position of the securities portfolio is due to changes in market interest rates since purchase. No securities are deemed to be other than temporarily impaired.

Loans

The loan portfolio comprises a major component of the Company’s earning assets. All of the Company’s loans are to domestic borrowers. Total net loans receivable (not including PPP loans) at March 31, 2021 increased $8.4 million, remaining at $1.1 billion from December 31, 2020. The gross loan-to-deposit ratio (not including PPP loans) decreased from 88% at December 31, 2020 to 84% at March 31, 2021. The Company’s loan portfolio at March 31, 2021 was comprised of residential real estate and consumer loans of $582.4 million, an increase of $5.3 million from December 31, 2020, and commercial loans of $516.2 million, an increase of $3.7 million from December 31, 2020. The Company has not originated, nor does it intend to originate, sub-prime mortgage loans. As described in Note 3 to the consolidated financial statements, the Company is participating in the SBA PPP program to support the needs of its small business clients. PPP loans receivable at March 31, 2021 and December 31, 2020 was $47.7 million and 54.3 million, respectively. Including PPP loans receivable, the gross loan-to-deposit ratio was 88% and 93% at March 31, 2021 and December 31, 2020.

Payment accommodations related to COVID-19 assistance were in the form of short-term (six months or less) principal and/or interest deferrals and the loans were considered current at the time of the accommodation. These payment accommodations were done in accordance with Section 4013 of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus and the Company will not be categorizing these modifications as troubled debt restructurings. As of March 31, 2021, the Company had two hundred thirty-six (236) loans totaling $130.3 million in which the payment accommodation period has ended and the loan payments have resumed under their original contractual terms. The Company had four (4) commercial loans totaling $16.5 million that have been given a fourth short-term (three month) payment accommodation period. Loans in the fourth short-term (three month) payment accommodation period consist of a $11.4 million loan to a borrower in the travel and hotel industry, a $3.8 million loan to a borrower in the assisted living facility industry, and two (2) loans totaling $1.4 million to a borrower in the restaurant industry. Except for these four (4) loans being granted a fourth short-term (three month) payment accommodation, between January 1, 2021 and March 31, 2021, there were no new Section 4013 modifications made during the quarter. At March 31, 2021, Management has not changed its classification of these loans due to the quality knowledge our loan officers have obtained from their discussions with the borrowers and due to the strength of the collateral and guarantors. Management continues to carefully monitor those borrowers who remain on payment deferral for additional signs of distress that would result in a downgrade in loan classification. The Company had one (1) consumer loan totaling $418 thousand that after its payment accommodation period ended in late March 2021 was taken to non-accrual and downgraded to substandard. No loss is anticipated on the loan. Except for this one (1) consumer loan, all loans under a modification period are considered current for payment status.

At April 30, 2021, the payment accommodation period on the four (4) commercial loans described above has ended and each of the loans have resumed payments under their original contractual terms. At April 30, 2021, the Company had a total of two hundred thirty-six (236) Section 4013 loans totaling $144.7 million, all of which are through the CARES Act Section 4013 payment

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accommodation period. Included in this total is the one (1) consumer loan described above totaling $418 thousand that was taken to non-accrual and downgraded to substandard in March 2021. Between April 1, 2021 and April 30, 2021, there were no new Section 4013 modifications made.

Credit Risk and Loan Quality

The allowance for loan losses increased $464 thousand to $11.0 million at March 31, 2021 compared to $10.6 million at December 31, 2020. At March 31, 2021 and December 31, 2020, the allowance for loan losses represented 1.00% and 0.97%, respectively, of total loans receivable (not including PPP loans which are guaranteed by the SBA). During 2020, the Company adjusted the economic risk factor, loan modifications risk factor, and other external factor methodologies to incorporate the current economic implications, unemployment rates and amount of loan modifications due to the COVID-19 pandemic, leading to the increase in the allowance for loan losses as a percentage of non-PPP loans. During the first quarter of 2021, the Company again adjusted the external factor methodology, leading to a further increase in the allowance for loan losses as a percentage of non-PPP loans. In determining its allowance for loan loss level at March 31, 2021, the Company considered the health and composition of its loan portfolio going into and during the COVID-19 pandemic. The Company’s nonperforming loans to total loans receivable (not including PPP loans) was 0.29% at March 31, 2021, up slightly from 0.25% at March 31, 2020 and 0.26% at December 31, 2020. The Company had $2 thousand in charge-offs for the three months ended March 31, 2021 and no charge-offs for the three months ended March 31, 2020. At March 31, 2021, approximately 95% of the Company’s loan portfolio is collateralized by real estate. Less than 6% of the Company’s loan portfolio is to borrowers in the more particularly hard-hit industries (including the travel and hotel industry, the full-service and limited-service restaurant industries, and the assisted living facilities industry) and the Company has no direct international exposure. The Company was not required to adopt the Current Expected Credit Losses (“CECL”) FASB accounting standard in 2020, as this guidance will not be effective for the Company until 2023. Based upon current economic conditions, the composition of the loan portfolio, the perceived credit risk in the portfolio and loan-loss experience of the Company and comparable institutions in the Company’s market area, management feels the allowance is adequate to absorb reasonably anticipated losses. The Company will continue to evaluate the allowance for loan losses as new information becomes available.

The aggregate balances on non-performing loans are included in the following table. Troubled debt restructurings, included in the following table, represent loans where the Company, for economic or legal reasons related to the debtor’s financial difficulties, has granted a concession to the debtor that it would not otherwise consider. There were no loans that were modified and classified as a TDR within the prior twelve months that experienced a payment default (loans ninety or more days past due) for the three months ended March 31, 2021.

The details for non-performing loans are included in the following table:

		March 31,		December 31,		March 31,
		2021		2020		2020
	(In Thousands)
Non-accrual - commercial	$	-	$	-	$	-
Non-accrual - consumer		692		274		17
Restructured loans, accruing interest and less than 90 days past due		2,531		2,559		2,612
Loans past due 90 or more days, accruing interest		-		-		-
Total nonperforming loans		3,223		2,833		2,629
Foreclosed assets		-		-		-
Total nonperforming assets	$	3,223	$	2,833	$	2,629
Nonperforming loans to total loans (not including PPP loans)		0.29%		0.26%		0.25%
Nonperforming assets to total assets		0.22%		0.20%		0.22%

Premises and Equipment

Company premises and equipment, net of accumulated depreciation, decreased $151 thousand from December 31, 2020 to March 31, 2021. This decrease is due to depreciation on existing premises and equipment, offset by purchases.

Deposits

Total deposits at March 31, 2021 increased $73.2 million to $1.3 billion from $1.2 billion at December 31, 2020. The increase in the Company’s deposits was due to an increase of $40.8 million in demand, NOW and money market deposits and a $44.4 million increase in savings deposits; offset by a decrease of $12.0 million in time deposits. The growth in total deposits was due to organic growth of new and existing customers and the injection of federal stimulus money into the economy from PPP funds and consumer stimulus payments. The shift out of time deposits was primarily due to promotions rolling off into lower yielding deposits due to the

34

current rate environment. The funds were primarily used to fund new loan growth, purchase securities, and to pay off PPPLF borrowings.

Liquidity

Liquidity represents the Company’s ability to meet the demands required for the funding of loans and to meet depositors’ requirements for use of their funds. The Company’s sources of liquidity are cash balances, due from banks, and federal funds sold. Cash and cash equivalents were $120.1 million at March 31, 2021, compared to $131.9 million at December 31, 2020.

Additional asset liquidity sources include principal and interest payments from the investment security and loan portfolios. Long-term liquidity needs may be met by selling unpledged securities available for sale, selling or participating loans, or raising additional capital. At March 31, 2021, the Company had $164.1 million of available for sale securities. Securities with carrying values of approximately $106.1 million and $98.7 million at March 31, 2021 and December 31, 2020, respectively, were pledged as collateral to secure securities sold under agreements to repurchase, public deposits, and for other purposes required or permitted by law.

At March 31, 2021, the Bank had a maximum borrowing capacity for short-term and long-term advances of approximately $693.6 million. This borrowing capacity with the FHLB includes a line of credit of $150.0 million. There were no short-term FHLB advances outstanding as of March 31, 2021 and December 31, 2020. There were $14.7 million in long-term FHLB advances outstanding as of March 31, 2021 and December 31, 2020. All FHLB borrowings are secured by qualifying assets of the Bank.

The Bank has a federal funds line of credit with the ACBB of $10.0 million, of which none was outstanding at March 31, 2021 and December 31, 2020. Advances from this line are unsecured.

As described in Note 3, the Bank had long-term PPPLF borrowings, term funding to depository institutions that originate loans to small businesses under the PPP, through the Federal Reserve Bank of Philadelphia of $50.8 million as of December 31, 2020. These borrowings were repaid in full, February 2021. All PPPLF borrowings were secured by PPP loans. PPP loans that were pledged to secure PPPLF extensions of credit are excluded from leverage ratio calculations.

The Company has no investment in or financial relationship with any unconsolidated entities that are reasonably likely to have a material effect on liquidity or capital resources.

Off-Balance Sheet Arrangements

The Company’s consolidated financial statements do not reflect various off-balance sheet arrangements that are made in the normal course of business, which may involve some liquidity risk. These off-balance sheet arrangements consist of unfunded loans and commitments, as well as lines of credit made under the same standards as on-balance sheet instruments. These unused commitments totaled $138.7 million and $135.4 million at March 31, 2021 and December 31, 2020, respectively. At March 31, 2021 and December 31, 2020, the Company had letters of credit outstanding of $5.2 million and $5.4 million, respectively. Because these instruments have fixed maturity dates, and because many of them will expire without being drawn upon, they do not generally present any significant liquidity risk to the Company. Management is of the opinion that the Company’s liquidity is sufficient to meet its anticipated needs. Management will continue to evaluate the Company’s liquidity position for changes caused by the COVID-19 pandemic.

Capital Resources and Adequacy

Total stockholders’ equity was $114.0 million as of March 31, 2021, representing a net increase of $1.9 million from December 31, 2020. The increase in capital was primarily the result of the net income of $4.0 million and an increase in surplus of $246 thousand due to stock grants and employee stock purchases with compensation expense, offset by a decrease of $2.0 million in unrealized gains on available for sale securities and a treasury stock purchase of $416 thousand.

The Company and the Bank are subject to various regulatory capital requirements administered by banking regulators. Failure to meet minimum capital requirements can initiate certain actions by regulators that could have a material effect on the consolidated financial statements.

The regulations require that banks maintain minimum amounts and ratios of total and Tier I capital (as defined in the regulations) to risk weighted assets (as defined in the regulations), and Tier I capital to average assets (as defined in the regulations). As of March 31, 2021, the Bank met the minimum requirements. In addition, the Bank’s capital ratios exceeded the amounts required to be considered “well capitalized” as defined in the regulations.

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35

The following table provides a comparison of the Bank’s risk-based capital ratios and leverage ratios:

Consolidated Bank
	March 31, 2021			December 31, 2020
	(Dollars In Thousands)
Tier I, common stockholders' equity	$	112,970		$	109,013
Tier II, allowable portion of allowance for loan losses		11,034			10,570
Total capital	$	124,004		$	119,583
Common equity tier 1 capital ratio		12.1	%		11.9	%
Tier I risk based capital ratio		12.1	%		11.9	%
Total risk based capital ratio		13.3	%		13.1	%
Tier I leverage ratio		8.0	%		8.1	%

Note: Unrealized gains and losses on securities available for sale are excluded from regulatory capital components of risk-based capital and leverage ratios.

In addition to the risk-based capital guidelines, the federal banking regulators established minimum leverage ratio (Tier 1 capital to total assets) guidelines for bank holding companies. These guidelines provide for a minimum leverage ratio of 3% for those bank holding companies which have the highest regulatory examination ratings and are not contemplating or experiencing significant growth or expansion. All other bank holding companies are required to maintain a leverage ratio of at least 4%.

The capital ratios to be considered “well capitalized” under the new capital rules are: common equity of 6.5%, Tier 1 leverage of 5%, Tier 1 risk-based capital of 8%, and Total Risk-Based capital of 10%.

The Company qualifies as a small bank holding company and is not subject to the Federal Reserve’s consolidated capital rules, although an institution that so qualifies may continue to file reports that include such capital amounts and ratios.  The Company has elected to continue to report those amounts and ratios.

The following table provides the Company’s risk-based capital ratios and leverage ratios:

Consolidated Corporation
	March 31, 2021			December 31, 2020
	(Dollars In Thousands)
Tier I, common stockholders' equity	$	113,124		$	109,237
Tier II, allowable portion of allowance for loan losses		11,034			10,570
Total capital	$	124,158		$	119,807
Common equity tier 1 capital ratio		12.1	%		12.0	%
Tier I risk based capital ratio		12.1	%		12.0	%
Total risk based capital ratio		13.3	%		13.1	%
Tier I leverage ratio		8.0	%		8.1	%

Note: Unrealized gains on securities available for sale are excluded from regulatory capital components of risk-based capital and leverage ratios.

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Item 3 – Quantitative and Qualitative Disclosures About Market Risk

The Company’s primary source of market risk is interest rate risk. A principal objective of the Company’s asset/liability management policy is to minimize the Company’s exposure to changes in interest rates by an ongoing review of the maturity and repricing of interest earning assets and interest bearing liabilities. The Asset Liability Committee (ALCO), included as part of the Board of Directors meetings, oversees this review, which establishes policies to control interest rate sensitivity. Interest rate sensitivity is the volatility of a company’s earnings resulting from a movement in market interest rates. The Company monitors rate sensitivity in order to reduce vulnerability to interest rate fluctuations while maintaining adequate capital levels and acceptable levels of liquidity. The Company’s asset/liability management policy, monthly and quarterly financial reports, along with simulation modeling, supplies management with guidelines to evaluate and manage rate sensitivity.

Based on a twelve-month forecast of the balance sheet, the following table sets forth the Company’s interest rate risk profile at March 31, 2021. For income simulation purposes, personal and business savings accounts reprice every three months, personal and business NOW accounts reprice every four months and personal and business money market accounts reprice every two months. The impact on net interest income, illustrated in the following table, would vary if different assumptions were used or if actual experience differs from that indicated by the assumptions.

Change in Interest Rates	Percentage Change in Net Interest Income
Down 100 basis points	-2.6%
Down 200 basis points	-5.6%
Up 100 basis points	2.2%
Up 200 basis points	4.2%

Item 4 – Controls and Procedures

The term “disclosure controls and procedures” is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods. Our Chief Executive Officer and our Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2021, and they have concluded that, as of this date, our disclosure controls and procedures were effective at ensuring that required information will be disclosed on a timely basis in our reports filed under the Exchange Act.

There were no significant changes to our internal controls over financial reporting or in the other factors that could significantly affect our internal controls over financial reporting during the quarter ended March 31, 2021, including any corrective actions with regard to significant deficiencies and material weakness.

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Part II - Other Information

Item 1 - Legal Proceedings

The Company and the Bank are an occasional party to legal actions arising in the ordinary course of its business. In the opinion of management, the Company has adequate legal defenses and/or insurance coverage respecting any and each of these actions and does not believe that they will materially affect the Company’s operations or financial position.

Item 1A - Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in “Risk Factors” included within the 2020 Form 10-K. There are no material changes from such risk factors. Such risks are not the only risks facing us.  Additional risks and uncertainties not currently known to us or that we currently believe to be immaterial also may materially adversely affect our business, financial condition and/or operating results.  See “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Caution About Forward-looking Statements.”

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth the number of shares of common stock repurchased by the Company, and the average paid for such shares, during the first quarter of 2021. Treasury stock repurchased, shown in the table below, settled on April 8, 2021. The Company has not publicly announced any purchase plan or program.

Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 - 31, 2021	N/A		N/A	N/A	N/A
February 1 - 28, 2021	N/A		N/A	N/A	N/A
March 1 - 31, 2021	25,000	$	16.65	N/A	N/A

Item 3 - Defaults Upon Senior Securities

None.

Item 4 – Mine Safety Disclosures

None.

Item 5 - Other Information

None.

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Item 6 - Exhibits

Exhibit
Number	Description
3.1	Articles of Incorporation as amended (conformed) (Incorporated by reference to Exhibit 3.1 of Registrant's
	Form 10-Q filed on August 12, 2016).
3.2	Amended and Restated By-Laws (conformed) (Incorporated by reference to Exhibit 3.2 of Registrant's
	Form 10-Q filed on August 12, 2016).
10.1	Lease agreement dated December 30, 2020 by and between Embassy Bank for the Lehigh Valley and Lehigh
	County Agricultural Society, Inc. (Incorporated by reference to Exhibit 10.1 of Registrant’s Form 8-K filed on
	January 6, 2021).
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).
32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 1350
	of the Sarbanes-Oxley Act of 2002.
101.1	Interactive Data Files (XBRL)

No.	Description
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definitions Linkbase Document.
104	Cover Page Interactive Data File (formatted as inline XBRL
	and contained in Exhibit 101)

* This instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL.

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39

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		EMBASSY BANCORP, INC.
		(Registrant)
Dated: May 10, 2021	By:	/s/ David M. Lobach, Jr.
		David M. Lobach, Jr.
		President and Chief Executive Officer
Dated: May 10, 2021	By:	/s/ Judith A. Hunsicker
		Judith A. Hunsicker
		First Executive Officer,
		Chief Operating Officer, Secretary and
		Chief Financial Officer

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, David M. Lobach, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Embassy Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By: /s/ David M. Lobach, Jr.

DAVID M. LOBACH, JR.

President and Chief Executive Officer

DATED: May 10, 2021

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Judith A. Hunsicker, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Embassy Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By: /s/ Judith A. Hunsicker

JUDITH A. HUNSICKER

First Executive Officer, Chief Operating Officer

and Chief Financial Officer

DATED: May 10, 2021

EX-32

EXHIBIT 32

Certification Pursuant to 18 U.S.C. 1350 and

Section 906 of Sarbanes-Oxley Act of 2002

We hereby certify that the foregoing Form 10-Q of Embassy Bancorp, Inc. for the quarter endingMarch 31, 2021  complies in all respects with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained therein fairly presents, in all material respects, the financial condition and results of operations of Embassy Bancorp, Inc.

By: /s/ David M. Lobach, Jr.

DAVID M. LOBACH, JR.

President and Chief Executive Officer

By: /s/ Judith A. Hunsicker

JUDITH A. HUNSICKER

First Executive Officer,  

Chief Operating Officer and

Chief Financial Officer

Dated: May 10, 2021

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 07, 2021
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity File Number	000-53528
Entity Registrant Name	Embassy Bancorp, Inc.
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	26-3339011
Entity Address, Address Line One	One Hundred Gateway Drive
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Bethlehem
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	18017
City Area Code	610
Local Phone Number	882-8800
Title of 12(b) Security	None
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,516,783
Entity Central Index Key	0001449794
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
ASSETS
Cash and due from banks	$ 14,405	$ 14,528
Interest bearing demand deposits with banks	104,709	116,379
Federal funds sold	1,000	1,000
Cash and Cash Equivalents	120,114	131,907
Securities available for sale	164,084	130,940
Restricted investment in bank stock	1,330	1,330
Loans receivable, net of allowance for loan losses of $11,034 in 2021; $10,570 in 2020	1,087,757	1,079,339
Paycheck Protection Program loans receivable	47,714	54,334
Premises and equipment, net of accumulated depreciation	3,195	3,346
Bank owned life insurance	25,337	25,189
Accrued interest receivable	3,114	3,136
Other assets	12,966	12,509
Total Assets	1,465,611	1,442,030
Deposits:
Non-interest bearing	291,411	269,996
Interest bearing	1,014,197	962,383
Total Deposits	1,305,608	1,232,379
Securities sold under agreements to repurchase	9,594	13,612
Long-term borrowings	14,651	14,651
Paycheck Protection Program Liquidity Facility borrowings		50,794
Accrued interest payable	1,069	1,640
Other liabilities	20,658	16,780
Total Liabilities	1,351,580	1,329,856
Stockholders' Equity:
Common stock, $1 par value; authorized 20,000,000 shares; 2021 issued 7,650,032 shares; outstanding 7,516,783 shares; 2020 issued 7,637,216 shares; outstanding 7,528,967 shares;	7,650	7,637
Surplus	26,651	26,405
Retained earnings	81,004	76,960
Accumulated other comprehensive income	907	2,937
Treasury stock, at cost: 133,249 and 108,249 shares at March 31, 2021 and December 31, 2020, respectively	(2,181)	(1,765)
Total Stockholders' Equity	114,031	112,174
Total Liabilities and Stockholders' Equity	$ 1,465,611	$ 1,442,030

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Consolidated Balance Sheets [Abstract]
Loans receivable, allowance	$ 11,034	$ 10,570
Common Stock, Par Value	$ 1	$ 1
Common Stock, Shares Authorized	20,000,000	20,000,000
Common Stock, Shares, Issued	7,650,032	7,637,216
Common Stock, Shares, Outstanding	7,516,783	7,528,967
Treasury Stock, Shares	133,249	108,249

XML

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
INTEREST INCOME
Loans, including fees	$ 10,128	$ 10,190
Paycheck Protection Program loans, including fees	1,100
Securities, taxable	326	377
Securities, non-taxable	206	212
Short-term investments, including federal funds sold	29	76
Total Interest Income	11,789	10,855
INTEREST EXPENSE
Deposits	1,093	1,995
Securities sold under agreements to repurchase and federal funds purchased	2	10
Short-term borrowings		51
Long-term borrowings	27	8
Paycheck Protection Program Liquidity Facility borrowings	15
Total Interest Expense	1,137	2,064
Net Interest Income	10,652	8,791
PROVISION FOR LOAN LOSSES	465	320
Net Interest Income after Provision for Loan Losses	10,187	8,471
OTHER NON-INTEREST INCOME
Merchant and credit card processing fees	69	77
Debit card interchange fees	185	133
Other service fees	106	117
Bank owned life insurance	148	(27)
Gain on sale of securities	24
Total Other Non-Interest Income	532	300
OTHER NON-INTEREST EXPENSES
Salaries and employee benefits	2,884	2,839
Occupancy and equipment	919	858
Data processing	666	636
Merchant and credit card processing	2	30
Advertising and promotion	186	296
Professional fees	208	236
FDIC insurance	123	51
Loan & real estate	75	68
Charitable contributions	194	289
Other	428	429
Total Other Non-Interest Expenses	5,685	5,732
Income Before Income Taxes	5,034	3,039
INCOME TAX EXPENSE	990	582
Net Income	$ 4,044	$ 2,457
BASIC EARNINGS PER SHARE	$ 0.54	$ 0.33
DILUTED EARNINGS PER SHARE	$ 0.53	$ 0.33

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
Consolidated Statements Of Comprehensive Income [Abstract]
Net Income		$ 4,044	$ 2,457
Change in Accumulated Other Comprehensive (Loss) Income:
Unrealized holding (loss) gain on securities available for sale		(2,546)	1,803
Less: reclassification adjustment for realized gains	[1],[2]	(24)
Total other comprehensive (loss) income, before tax		(2,570)	1,803
Income tax effect		540	(378)
Net unrealized (loss) gain		(2,030)	1,425
Other comprehensive (loss) income, net of tax		(2,030)	1,425
Comprehensive Income		$ 2,014	$ 3,882

[1] Realized gains on securities transactions included in gain on sales of securities in the accompanying Consolidated Statements of Income.

[2] Tax effect included in income tax expense in the accompanying Consolidated Statements of Income.

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member] Director [Member]	Common Stock [Member] Officer [Member]	Common Stock [Member]	Surplus [Member] Director [Member]	Surplus [Member] Officer [Member]	Surplus [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Treasury Stock [Member]	Director [Member]	Officer [Member]	Total
BALANCE-Beginning at Dec. 31, 2019			$ 7,544			$ 25,937	$ 65,794	$ 1,340	$ (1,000)			$ 99,615
Net income							2,457					2,457
Other comprehensive income (loss), net of tax								1,425				1,425
Common stock grants	$ 13			$ 135						$ 148
Compensation expense recognized on stock grants, net of unearned compensation expense		$ 19			$ 25						$ 44
Shares issued under employee stock purchase plan			1			13						14
Purchase of treasury stock									(720)			(720)
BALANCE-Ending at Mar. 31, 2020			7,577			26,110	68,251	2,765	(1,720)			102,983
BALANCE-Beginning at Dec. 31, 2020			7,637			26,405	76,960	2,937	(1,765)			112,174
Net income							4,044					4,044
Other comprehensive income (loss), net of tax								(2,030)				(2,030)
Common stock grants	$ 12			$ 174						$ 186
Compensation expense recognized on stock grants, net of unearned compensation expense						60						60
Shares issued under employee stock purchase plan			1			12						13
Purchase of treasury stock									(416)			(416)
BALANCE-Ending at Mar. 31, 2021			$ 7,650			$ 26,651	$ 81,004	$ 907	$ (2,181)			$ 114,031

XML

Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		51 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021
Unearned compensation expense on stock grants	$ 698		$ 698
Shares issued under employee stock purchase plan, shares	807	1,289
Purchase treasury stock, shares	25,000	40,000
Purchased treasury stock, price per share	$ 16.65	$ 18.00
Director [Member]
Common stock grants, shares	12,009	12,757
Officer [Member]
Common stock grants, shares		19,453
Unearned compensation expense on stock grants		$ 639
Employee Stock Purchase Plan [Member]
Shares issued under employee stock purchase plan, shares			16,068

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 4,044	$ 2,457
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	465	320
Amortization of deferred loan costs	51	78
Accretion of deferred Paycheck Protection Program loan fees	(964)
Depreciation	197	203
Net amortization of investment security premiums and discounts	95	58
Stock compensation expense	246	192
(Income) loss on bank owned life insurance	(148)	27
Realized gain on sale of securities available for sale	(24)
Loans originated for sale		(659)
Decrease (increase) in accrued interest receivable	22	(31)
Decrease in other assets	83	153
Decrease in accrued interest payable	(571)	(1,196)
Increase in other liabilities	475	143
Net Cash Provided by Operating Activities	3,971	1,745
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available for sale	(57,533)	(1,489)
Maturities, calls and principal repayments of securities available for sale	21,402	6,203
Proceeds from sales of securities available for sale	3,333
Net increase in loans	(8,934)	(18,314)
Net increase in Paycheck Protection Program loans	7,584
Net redemption of restricted investment in bank stock		137
Purchases of premises and equipment	(46)	(300)
Net Cash Used in Investing Activities	(34,194)	(13,763)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits	73,229	16,166
Net (decrease) increase in securities sold under agreements to repurchase	(4,018)	3,177
Proceeds from Employee Stock Purchase Plan	13	14
Decrease in short-term borrowed funds		(18,067)
Proceeds from long-term borrowed funds		14,651
Repayment of Paycheck Protection Program Liquidity Facility borrowed funds	(50,794)
Purchase of treasury stock		(720)
Net Cash Provided by Financing Activities	18,430	15,221
Net (Decrease) Increase in Cash and Cash Equivalents	(11,793)	3,203
CASH AND CASH EQUIVALENTS - BEGINNING	131,907	39,986
CASH AND CASH EQUIVALENTS - ENDING	120,114	43,189
SUPPLEMENTARY CASH FLOWS INFORMATION
Interest paid	1,708	3,260
Income taxes paid	200
Non-cash Investing and Financing Activities:
Transfer of loans held for investment to held for sale		$ 659
Right of use assets obtained in exchange for new operating lease liabilities	635
Unsettled trades to purchase securities	2,987
Unsettled purchase of treasury stock	$ 416

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Basis Of Presentation

3 Months Ended

Mar. 31, 2021

Basis Of Presentation [Abstract]

Basis Of Presentation

Note 1 – Basis of Presentation

Embassy Bancorp, Inc. (the “Company”) is a Pennsylvania corporation organized in 2008 and registered as a bank holding company pursuant to the Bank Holding Company Act of 1956, as amended (the “BHC Act”). The Company was formed for purposes of acquiring Embassy Bank For The Lehigh Valley (the “Bank”) in connection with the reorganization of the Bank into a bank holding company structure, which was consummated on November 11, 2008. Accordingly, the Company owns all of the capital stock of the Bank, giving the organization more flexibility in meeting its capital needs as the Company continues to grow. Embassy Holdings, LLC (the “LLC”) is a wholly-owned subsidiary of the Bank organized to engage in the holding of property acquired by the Bank in satisfaction of debts previously contracted. As such, the consolidated financial statements contained herein include the accounts of the Company, the Bank and the LLC. All significant intercompany transactions and balances have been eliminated.

The Bank, which is the Company’s principal operating subsidiary, was originally incorporated as a Pennsylvania bank on May 11, 2001 and opened its doors on November 6, 2001. It was formed by a group of local business persons and professionals with significant prior experience in community banking in the Lehigh Valley area of Pennsylvania, the Bank’s primary market area.

The accompanying unaudited financial statements have been prepared in accordance with United States of America generally accepted accounting principles (“US GAAP”) for interim financial information and in accordance with instructions for Form 10-Q and Rule 10-01 of the Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

The consolidated financial statements presented in this report should be read in conjunction with the audited consolidated financial statements and the accompanying notes for the year ended December 31, 2020, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 12, 2021.

The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q were issued.

Certain amounts in the 2020 consolidated financial statements may have been reclassified to conform to 2021 presentation. These reclassifications had no effect on 2020 net income.

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Summary Of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

Note 2 - Summary of Significant Accounting Policies

The significant accounting policies of the Company as applied in the interim financial statements presented herein are substantially the same as those followed on an annual basis as presented in the Company’s Form 10-K for the year ended December 31, 2020.

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COVID-19

3 Months Ended

Mar. 31, 2021

COVID-19 [Abstract]

COVID-19

Note 3 – COVID-19

On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic and on March 13, 2020 the United States government declared COVID-19 as a national emergency. The continuing effects of COVID-19 could adversely impact a broad range of industries in which the Company’s customers operate and impair their ability to fulfill their financial obligations to the Company. The economic effects of COVID-19 may adversely affect the Company’s financial condition and results of operations as further described below. The full future potential impact is unknown at this time.

‎

During the three months ended March 31, 2021 and the year ended December 31, 2020, the Company provided certain borrowers affected in a variety of ways by COVID-19 with payment accommodations that facilitate their ability to work through the immediate impact of the virus. Payment accommodations were in the form of short-term principal and/or interest deferrals. These payment accommodations were made in accordance with Section 4013 of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. Section 4013 of the CARES Act, enacted on March 27, 2020, provides that, from the period beginning March 1, 2020 until the earlier of December 31, 2020, subsequently extended until December 31, 2021, or the date that is 60 days after the date on which the national emergency concerning the COVID-19 pandemic declared by the President of the United States under the National Emergencies Act terminates, the Company may elect to suspend US GAAP for loan modifications related to the pandemic which would otherwise be categorized as troubled debt restructurings and suspend any determination of a loan modified as a result of the effects of the pandemic as being a troubled debt restructuring, including impairment for accounting purposes. Interest income is continuing to be recognized during the accommodation period. The following table presents COVID-19 CARES Act Section 4013 loans based on loan type, payment accommodation status, and amount at March 31, 2021 and December 31, 2020:

	March 31, 2021
	Number of Loans - Payment Accommodation Period Ended	Number of Loans - Payment Accommodation Period Active	Total Number of Loans		Loan Amount - Payment Accommodation Period Ended		Loan Amount - Payment Accommodation Period Active	Total Loan Amount
	(Dollars In Thousands)
Commercial real estate	128	4	132	$	110,298	$	16,538	$	126,836
Commercial	40	-	40		6,636		-		6,636
Residential real estate	67	-	67		13,708		-		13,708
Consumer	2	-	2		29		-		29
Total	237	4	241	$	130,671	$	16,538	$	147,209
	December 31, 2020
	Number of Loans - Payment Accommodation Period Ended	Number of Loans - Payment Accommodation Period Active	Total Number of Loans		Loan Amount - Payment Accommodation Period Ended		Loan Amount - Payment Accommodation Period Active	Total Loan Amount
	(Dollars In Thousands)
Commercial real estate	130	7	137	$	112,016	$	16,830	$	128,846
Commercial	43	1	44		7,445		752		8,197
Residential real estate	68	4	72		13,517		717		14,234
Consumer	2	-	2		31		-		31
Total	243	12	255	$	133,009	$	18,299	$	151,308

Included in the March 31, 2021 totals above are two hundred thirty-six (236) loans totaling $130.3 million in which the payment accommodation period has ended and the loan payments have resumed under their original contractual terms. Also included in the March 31, 2021 totals above is one (1) consumer loan totaling $418 thousand that, after its payment accommodation period ended in late March 2021, was taken to non-accrual and downgraded to substandard. No loss is anticipated on the loan. Also included in the March 31, 2021 totals above are four (4) commercial loans totaling $16.5 million that are currently under an active fourth short-term (three month) payment accommodation period. Loans in the fourth short-term (three month) payment accommodation period consist of a $11.4 million loan to a borrower in the travel and hotel industry, a $3.8 million loan to a borrower in the assisted living facility industry and two (2) loans totaling $1.4 million to a borrower in the restaurant industry. Except for these four (4) loans being granted a fourth short-term (three month) payment accommodation, between January 1, 2021 and March 31, 2021, there were no new Section 4013 modifications made during the quarter. At March 31, 2021, Management has not changed its classification of these loans due to the knowledge our loan officers have obtained from their discussions with the borrowers and due to the strength of the collateral and guarantors. Management continues to carefully monitor those borrowers who remain on payment deferral for additional signs of

distress that would result in a downgrade in loan classification. Except for the one (1) consumer loan taken to non-accrual, all loans granted a payment accommodation are considered current for payment status.

At April 30, 2021, the payment accommodation period on the four (4) commercial loans described above has ended and each of the loans have resumed payments under their original contractual terms. At April 30, 2021, the Company had a total of two hundred thirty-six (236) Section 4013 loans totaling $144.7 million, all of which are through the CARES Act Section 4013 payment accommodation period. Included in this total is the one (1) consumer loan described above totaling $418 thousand that was taken to non-accrual and downgraded to substandard in March 2021. Between April 1, 2021 and April 30, 2021, there were no new Section 4013 modifications made.

The Company participates in the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) under the CARES Act and subsequent 2021 Consolidated Appropriations Act (“CAA”). As of March 31, 2021, the Company had a total of three hundred fifty-seven (357) PPP loans outstanding with a receivable balance of $47.7 million, net of $1.4 million of unearned origination fees and costs. At December 31, 2020, the Company had a total of four hundred seventy (470) PPP loans outstanding with a receivable balance of $54.3 million, net of $1.2 million of unearned origination fees and costs. From January 1, 2021 to March 31, 2021, the Company originated two hundred seventy-three (273) new PPP loans with a balance of $28.6 million, net of $1.2 million of unearned origination fees and costs. From January 1, 2021 to March 31, 2021, the Company received forgiveness payments from the SBA on PPP loan principal balances of $36.2 million. As of April 30, 2021, the Company had a total of three hundred fifty-five (355) PPP loans outstanding with a receivable balance of $43.6 million, net of $1.4 million of unearned origination fees and costs. From April 1, 2021 to April 30, 2021, the Company originated forty-eight (48) new PPP loans with a balance of $2.2 million, net of $141 thousand of unearned origination fees and costs. From April 1, 2021 to April 30, 2021, the Company received forgiveness payments from the SBA on PPP loan principal balances of $6.5 million.

These PPP loans are 100% guaranteed by the SBA, have a two year or up to five year maturity and an interest rate of 1% throughout the term of the loan, with payments deferred until forgiveness proceeds received from the SBA or ten months after the end of the covered period. The SBA may forgive the PPP loans if certain conditions are met by the borrower, including using at least 60% of the proceeds for payroll costs. The SBA also provided the Company with a processing fee for each loan, with the amount of such fee pre-determined by the SBA dependent upon the size of each loan. As of March 31, 2021 and December 31, 2020, the Company has net deferred PPP loan fees and costs of $1.4 million and $1.2 million, respectively, which will be recognized through interest income over the life of the related PPP loans. Because of the 100% SBA guarantee, the Company has determined that no allowance for loan losses is required on the PPP loans. All PPP loans have a pass rating and none are past due under their contractual terms.

In April 2020, the Company applied and was approved by the Federal Reserve Board for both the ability to borrow under its Paycheck Protection Program Liquidity Facility (“PPPLF”), as well as its Discount Window. The PPPLF provides term funding to depository institutions that originate loans to small businesses under the PPP. PPP loans that are pledged to secure PPPLF extensions of credit are excluded from leverage ratio calculations. The Company had PPPLF borrowings of $50.8 million at December 31, 2020. As of February 3, 2021, the PPPLF borrowings have been paid off in full. The Company is approved to borrow under the PPPLF through June 30, 2021.

The Company’s allowance for loan losses increased $464 thousand to $11.0 million at March 31, 2021 compared to $10.6 million at December 31, 2020. At March 31, 2021 and December 31, 2020, the allowance for loan losses represented 1.00% and 0.97%, respectively, of total loans receivable (not including PPP loans which are guaranteed by the SBA). During 2020, the Company adjusted the economic risk factor, loan modifications risk factor, and other external factor methodologies to incorporate the current economic implications, unemployment rates and amount of loan modifications due to the COVID-19 pandemic, leading to the increase in the allowance for loan losses as a percentage of non-PPP loans. During the first quarter of 2021, the Company again adjusted the other external factor methodology, leading to a further increase in the allowance for loan losses as a percentage of non-PPP loans. In determining its allowance for loan loss level at March 31, 2021, the Company considered the health and composition of its loan portfolio going into and during the COVID-19 pandemic. All loans that have the CARES Act Section 4013 modification, regardless of whether original contractual payment terms have resumed, are provided additional qualitative reserve in the Company’s allowance for loan loss calculation. The Company’s nonperforming loans to total loans receivable (not including PPP loans) was 0.29% at March 31, 2021, up slightly from 0.25% at March 31, 2020 and 0.26% at December 31, 2020. The Company had $2 thousand in charge-offs for the three months ended March 31, 2021 and no charge-offs for the three months ended March 31, 2020. At March 31, 2021, approximately 95% of the Company’s loan portfolio is collateralized by real estate. Less than 6% of the Company’s loan portfolio is to borrowers in the more particularly hard-hit industries (including the travel and hotel industry, the full-service and limited-service restaurant industries, and the assisted living facilities industry) and the Company has no direct international exposure. The Company was not required to adopt the Current Expected Credit Losses (“CECL”) FASB accounting standard in 2020, as this guidance will not be effective for the Company until 2023. Based upon current economic conditions, the composition of the loan

portfolio, the perceived credit risk in the portfolio and loan-loss experience of the Company and comparable institutions in the Company’s market area, management feels the allowance is adequate to absorb reasonably anticipated losses.

In response to the COVID-19 outbreak, the Federal Reserve Board in mid-March 2020 has reduced by 150 basis points the benchmark federal funds rate to a target range of 0% to 0.25%, and the yields on 10 year and 30 year Treasury notes have declined to historic lows. As a result of the decline in the Federal Reserve Board’s target federal funds rate and yields on Treasury notes, the Company’s future net interest margin and spread may be further reduced.

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Securities Available For Sale

3 Months Ended

Mar. 31, 2021

Securities Available For Sale [Abstract]

Securities Available For Sale

Note 4 – Securities Available For Sale

At March 31, 2021 and December 31, 2020, respectively, the amortized cost and approximate fair values of securities available-for-sale were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
March 31, 2021:
U.S. Government agency obligations	$	33,392	$	1	$	(66)	$	33,327
Municipal bonds		43,192		1,286		(233)		44,245
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		512		15		-		527
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		85,840		1,349		(1,204)		85,985
Total	$	162,936	$	2,651	$	(1,503)	$	164,084
December 31, 2020:
U.S. Treasury securities	$	9,998	$	-	$	-	$	9,998
U.S. Government agency obligations		39,059		1		(24)		39,036
Municipal bonds		37,409		1,967		-		39,376
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		512		31		-		543
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		40,244		1,743		-		41,987
Total	$	127,222	$	3,742	$	(24)	$	130,940

The amortized cost and fair value of securities as of March 31, 2021, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without any penalties.

		Amortized		Fair
		Cost		Value
	(In Thousands)
Due in one year or less	$	4,623	$	4,624
Due after one year through five years		30,830		30,771
Due after five years through ten years		8,301		8,632
Due after ten years		32,830		33,545
		76,584		77,572
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - commercial		512		527
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - residential		85,840		85,985
Total	$	162,936	$	164,084

Gross gains of $24 thousand were realized on sales of securities for the three months ended March 31, 2021. There were no gross losses on the sales of securities for the three months ended March 31, 2021. There were no sales of securities for the three months ended March 31, 2020.

Securities with a carrying value of $106.1 million and $98.7 million at March 31, 2021 and December 31, 2020, respectively, were subject to agreements to repurchase, pledged to secure public deposits, or pledged for other purposes required or permitted by law.

The following table shows the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2021 and December 31, 2020, respectively:

		Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2021:	(In Thousands)
U.S. Government agency obligations	$	20,094	$	(66)	$	-	$	-	$	20,094	$	(66)
Municipal bonds		7,117		(233)		-		-		7,117		(233)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
residential		53,169		(1,204)		-		-		53,169		(1,204)
Total Temporarily Impaired Securities	$	80,380	$	(1,503)	$	-	$	-	$	80,380	$	(1,503)
		.
December 31, 2020:
U.S. Government agency obligations	$	31,369	$	(24)	$	-	$	-	$	31,369	$	(24)
Total Temporarily Impaired Securities	$	31,369	$	(24)	$	-	$	-	$	31,369	$	(24)

The Company had twenty-one (21) securities in an unrealized loss position at March 31, 2021 and five (5) securities in an unrealized loss position at December 31, 2020. As of March 31, 2021, the Company either has the intent and ability to hold the securities until maturity or market price recovery or believes that it is more likely than not that it will not be required to sell such securities. Management believes that the unrealized loss only represents temporary impairment of the securities. None of the individual losses are significant.

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Restricted Investment In Bank Stock

3 Months Ended

Mar. 31, 2021

Restricted Investment In Bank Stock [Abstract]

Restricted Investment In Bank Stock

Note 5 – Restricted Investment in Bank Stock

Restricted investments in bank stock consist of FHLBank of Pittsburgh (“FHLB”) stock and Atlantic Community Bankers Bank (“ACBB”) stock. The restricted stocks are carried at cost. Federal law requires a member institution of the FHLB to hold stock of its district FHLB according to a predetermined formula. The Bank had FHLB stock at a carrying value of $1.3 million as of March 31, 2021 and December 31, 2020. The Bank had ACBB stock at a carrying value of $40 thousand at March 31, 2021 and December 31, 2020.

Management evaluates the FHLB and ACBB restricted stock for impairment. Management’s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) the significance of the decline in net assets of the issuer as compared to the capital stock amount for the issuer and the length of time this situation has persisted, (2) commitments by the issuer to make payments required by law or regulation and the level of such payments in relation to the operating performance of the issuer, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the issuer.

Based upon its evaluation of the foregoing criteria, management believes no impairment charge is necessary related to the FHLB or ACBB stock as of March 31, 2021.

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Loans And Credit Quality

3 Months Ended

Mar. 31, 2021

Loans And Credit Quality [Abstract]

Loans And Credit Quality

Note 6 – Loans and Credit Quality

The Company has presented PPP loans of $47.7 million at March 31, 2021 and $54.3 million at December 31, 2021, respectively, separately from loans receivable on the Consolidated Balance Sheet. As described in Note 3, PPP loans are 100% SBA guaranteed and

the Company has determined that no allowance for loan losses is required on PPP loans. All PPP loans are risk rated as pass. PPP loans are not included in the following composition and credit quality tables.

The following table presents the composition of loans receivable at March 31, 2021 and December 31, 2020, respectively:

	March 31, 2021			December 31, 2020
			Percentage of			Percentage of
	Balance		total Loans	Balance		total Loans
		(Dollars in Thousands)
Commercial real estate	$	461,331	41.99%	$	452,251	41.51%
Commercial construction		10,264	0.93%		12,176	1.12%
Commercial		44,650	4.06%		48,114	4.42%
Residential real estate		581,765	52.97%		576,437	52.90%
Consumer		603	0.05%		640	0.05%
Total loans		1,098,613	100.00%		1,089,618	100.00%
Unearned origination fees		178			291
Allowance for loan losses		(11,034)			(10,570)
Net Loans	$	1,087,757		$	1,079,339

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention (potential weaknesses), substandard (well defined weaknesses) and doubtful (full collection unlikely) within the Company's internal risk rating system as of March 31, 2021 and December 31, 2020, respectively:

	Pass		Special Mention		Substandard		Doubtful		Total
March 31, 2021		(In Thousands)
Commercial real estate	$	459,916	$	-	$	1,415	$	-	$	461,331
Commercial construction		9,949		-		315		-		10,264
Commercial		44,650		-		-		-		44,650
Residential real estate		580,267		506		992		-		581,765
Consumer		603		-		-		-		603
Total	$	1,095,385	$	506	$	2,722	$	-	$	1,098,613
December 31, 2020
Commercial real estate	$	450,823	$	-	$	1,428	$	-	$	452,251
Commercial construction		11,861		-		315		-		12,176
Commercial		48,114		-		-		-		48,114
Residential real estate		575,344		512		581		-		576,437
Consumer		640		-		-		-		640
Total	$	1,086,782	$	512	$	2,324	$	-	$	1,089,618

At March 31, 2021, the Company had no foreclosed assets and had $42 thousand in recorded investment in one (1) consumer mortgage loan collateralized by residential real estate in the process of foreclosure. At December 31, 2020 the Company had no foreclosed assets or recorded investment in consumer mortgage loans collateralized by residential real estate in the process of foreclosure.

‎

The following table summarizes information in regards to impaired loans by loan portfolio class as of March 31, 2021 and December 31, 2020, respectively:

	March 31, 2021						December 31, 2020
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In Thousands)
With no related allowance recorded:
Commercial real estate	$	840	$	1,080			$	851	$	1,091
Commercial construction		315		315				315		315
Commercial		-		-				-		-
Residential real estate		1,351		1,421				944		1,014
Consumer		-		-				-		-
With an allowance recorded:
Commercial real estate	$	690	$	690	$	15	$	696	$	696	$	21
Commercial construction		-		-		-		-		-		-
Commercial		228		228		22		230		230		23
Residential real estate		596		596		123		604		604		125
Consumer		-		-		-		-		-		-
Total:
Commercial real estate	$	1,530	$	1,770	$	15	$	1,547	$	1,787	$	21
Commercial construction		315		315		-		315		315		-
Commercial		228		228		22		230		230		23
Residential real estate		1,947		2,017		123		1,548		1,618		125
Consumer		-		-		-		-		-		-
	$	4,020	$	4,330	$	160	$	3,640	$	3,950	$	169

‎

The following tables summarize information regarding the average recorded investment and interest income recognized on impaired loans by loan portfolio for the three months ended March 31, 2021 and 2020, respectively:

	Three Months Ended March 31,
	2021				2020
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In Thousands)
With no related allowance recorded:
Commercial real estate	$	846	$	15	$	1,257	$	13
Commercial construction		315		3		315		3
Commercial		-		-		-		-
Residential real estate		1,148		7		619		7
Consumer		-		-		-		-
With an allowance recorded:
Commercial real estate	$	693	$	7	$	350	$	6
Commercial construction		-		-		-		-
Commercial		229		2		234		2
Residential real estate		600		5		720		5
Consumer		-		-		-		-
Total:
Commercial real estate	$	1,539	$	22	$	1,607	$	19
Commercial construction		315		3		315		3
Commercial		229		2		234		2
Residential real estate		1,748		12		1,339		12
Consumer		-		-		-		-
	$	3,831	$	39	$	3,495	$	36

The following table presents non-accrual loans by classes of the loan portfolio:

	March 31, 2021		December 31, 2020
	(In Thousands)
Commercial real estate	$	-	$	-
Commercial construction		-		-
Commercial		-		-
Residential real estate		692		274
Consumer		-		-
Total	$	692	$	274

‎

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable 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 past due status as of March 31, 2021 and December 31, 2020, respectively:

					Greater								Loan
					than								Receivables >
	30-59 Days		60-89 Days		90 Days		Total				Total Loan		90 Days and
	Past Due		Past Due		Past Due		Past Due		Current		Receivables		Accruing
March 31, 2021	(In Thousands)
Commercial real estate	$	-	$	-	$	-	$	-	$	461,331	$	461,331	$	-
Commercial construction		-		-		-		-		10,264		10,264		-
Commercial		-		-		-		-		44,650		44,650		-
Residential real estate		74		154		259		487		581,278		581,765		-
Consumer		-		-		-		-		603		603		-
Total	$	74	$	154	$	259	$	487	$	1,098,126	$	1,098,613	$	-
December 31, 2020
Commercial real estate	$	514	$	-	$	-	$	514	$	451,737	$	452,251	$	-
Commercial construction		-		-		-		-		12,176		12,176		-
Commercial		-		-		-		-		48,114		48,114		-
Residential real estate		336		-		42		378		576,059		576,437		-
Consumer		2		-		-		2		638		640		-
Total	$	852	$	-	$	42	$	894	$	1,088,724	$	1,089,618	$	-

The following tables detail the activity in the allowance for loan losses for the three months ended March 31, 2021 and 2020:

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses	(In Thousands)
Three Months Ending March 31, 2021
Beginning Balance - December 31, 2020	$	4,379	$	150	$	848	$	4,485	$	14	$	694	$	10,570
Charge-offs		-		-		-		-		(2)		-		(2)
Recoveries		-		-		-		1		-		-		1
Provisions		308		(37)		68		11		-		115		465
Ending Balance - March 31, 2021	$	4,687	$	113	$	916	$	4,497	$	12	$	809	$	11,034
Three Months Ending March 31, 2020
Beginning Balance - December 31, 2019	$	3,221	$	121	$	770	$	3,488	$	19	$	403	$	8,022
Charge-offs		-		-		-		-		-		-		-
Recoveries		24		-		-		-		-		-		24
Provisions		108		-		47		139		(1)		27		320
Ending Balance - March 31, 2020	$	3,353	$	121	$	817	$	3,627	$	18	$	430	$	8,366

‎

The following tables represent the allocation for loan losses and the related loan portfolio disaggregated based on impairment methodology at March 31, 2021 and December 31, 2020:

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
	(In Thousands)
March 31, 2021
Allowance for Loan Losses
Ending Balance	$	4,687	$	113	$	916	$	4,497	$	12	$	809	$	11,034
Ending balance: individually evaluated for impairment	$	15	$	-	$	22	$	123	$	-	$	-	$	160
Ending balance: collectively evaluated for impairment	$	4,672	$	113	$	894	$	4,374	$	12	$	809	$	10,874
Loans receivables:
Ending balance	$	461,331	$	10,264	$	44,650	$	581,765	$	603			$	1,098,613
Ending balance: individually evaluated for impairment	$	1,530	$	315	$	228	$	1,947	$	-			$	4,020
Ending balance: collectively evaluated for impairment	$	459,801	$	9,949	$	44,422	$	579,818	$	603			$	1,094,593
December 31, 2020
Allowance for Loan Losses
Ending Balance	$	4,379	$	150	$	848	$	4,485	$	14	$	694	$	10,570
Ending balance: individually evaluated for impairment	$	21	$	-	$	23	$	125	$	-	$	-	$	169
Ending balance: collectively evaluated for impairment	$	4,358	$	150	$	825	$	4,360	$	14	$	694	$	10,401
Loans receivables:
Ending balance	$	452,251	$	12,176	$	48,114	$	576,437	$	640			$	1,089,618
Ending balance: individually evaluated for impairment	$	1,547	$	315	$	230	$	1,548	$	-			$	3,640
Ending balance: collectively evaluated for impairment	$	450,704	$	11,861	$	47,884	$	574,889	$	640			$	1,085,978

Troubled Debt Restructurings

The Company may grant a concession or modification for economic or legal reasons related to a borrower’s financial condition that it would not otherwise consider, resulting in a modified loan which is then identified as a troubled debt restructuring (“TDR”). The Company may modify loans through rate reductions, extensions to maturity, interest only payments, or payment modifications to better coincide the timing of payments due under the modified terms with the expected timing of cash flows from the borrowers’ operations. Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. TDRs are considered impaired loans for purposes of calculating the Company’s allowance for loan losses. Payment accommodations completed since the COVID-19 outbreak are reported in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus as described in Note 3 and are not considered a TDR.

The Company identifies loans for potential restructure primarily through direct communication with the borrower and the evaluation of the borrower’s financial statements, revenue projections, tax returns, and credit reports.  Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future.

‎

The following table presents TDR’s outstanding:

	Accrual Loans		Non-Accrual Loans		Total Modifications
March 31, 2021	(In Thousands)
Commercial real estate	$	1,113	$	-	$	1,113
Commercial construction		260		-		260
Commercial		228		-		228
Residential real estate		930		14		944
Consumer		-		-		-
	$	2,531	$	14	$	2,545
December 31, 2020
Commercial real estate	$	1,125	$	-	$	1,125
Commercial construction		260		-		260
Commercial		230		-		230
Residential real estate		944		15		959
Consumer		-		-		-
	$	2,559	$	15	$	2,574

As of March 31, 2021, no available commitments were outstanding on TDRs.

There were no newly restructured loans that occurred during the three months ended March 31, 2021 and 2020.

There were no loans that were modified and classified as a TDR within the prior twelve months that experienced a payment default (loans ninety days or more past due) during the three months ended March 31, 2021 and 2020.

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Deposits

3 Months Ended

Mar. 31, 2021

Deposits [Abstract]

Deposits

Note 7 – Deposits

The components of deposits at March 31, 2021 and December 31, 2020 are as follows:

	March 31,		December 31,
	2021		2020
	(In Thousands)
Demand, non-interest bearing	$	291,411	$	269,996
Demand, NOW and money market, interest bearing		219,254		199,845
Savings		591,176		546,784
Time, $250 and over		78,267		85,272
Time, other		125,500		130,482
Total deposits	$	1,305,608	$	1,232,379

At March 31, 2021, the scheduled maturities of time deposits are as follows (in thousands):

2021 (remainder of the year)	$	111,820
2022		50,680
2023		33,776
2024		5,647
2025		1,258
2026		586
	$	203,767

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Short-Term And Long-Term Borrowings

3 Months Ended

Mar. 31, 2021

Short-Term And Long-Term Borrowings [Abstract]

Short-Term And Long-Term Borrowings

Note 8 – Short-term and Long-term Borrowings

Securities sold under agreements to repurchase, federal funds purchased, and FHLB short term advances generally represent overnight or less than twelve month borrowings. Long term advances from the FHLB are for periods of twelve months or more and are generally less than sixty months. The Bank has an agreement with the FHLB, which allows for borrowings up to a percentage of qualifying assets. At March 31, 2021, the Bank had a maximum borrowing capacity for short-term and long-term advances of approximately $693.6 million. This borrowing capacity with the FHLB includes a line of credit of $150.0 million. There were no short-term FHLB advances outstanding as of March 31, 2021 and December 31, 2020. There were $14.7 million in long-term FHLB advances outstanding as of March 31, 2021 and December 31, 2020. All FHLB borrowings are secured by qualifying assets of the Bank.

The components of long-term borrowings with the FHLB were as follows:

	March 31, 2021
	(Dollars in Thousands)
Maturity Date	Interest Rate		Outstanding
March 2022	0.79%	$	10,000
March 2022	0.64%		2,663
March 2022	0.61%		1,988
Total FHLB Outstanding Borrowings		$	14,651

The Bank has a federal funds line of credit with the ACBB of $10.0 million, of which none was outstanding at March 31, 2021 and December 31, 2020. Advances from this line are unsecured.

As described in Note 3, the Bank had no long-term PPPLF borrowings through the Federal Reserve Bank of Philadelphia as of March 31, 2021 and had $50.8 million, at an interest rate of 0.35%, as of December 31, 2020. All PPPLF borrowings were secured by PPP loans.

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Stock Incentive Plan And Employee Stock Purchase Plan

3 Months Ended

Mar. 31, 2021

Stock Incentive Plan And Employee Stock Purchase Plan [Abstract]

Stock Incentive Plan And Employee Stock Purchase Plan

Note 9 – Stock Incentive Plan and Employee Stock Purchase Plan

Stock Incentive Plan:

The Company maintains the Embassy Bancorp, Inc. Stock Incentive Plan (the “SIP”), originally adopted by the Company’s shareholders effective June 16, 2010 and subsequently amended, restated, and approved on June 20, 2019. The SIP authorizes the Board of Directors, or a committee authorized by the Board of Directors, to award a stock based incentive to (i) designated officers (including officers who are directors) and other designated employees at the Company and its subsidiaries, and (ii) non-employee members of the Board of Directors and advisors and consultants to the Company and its subsidiaries. The SIP provides for stock based incentives in the form of incentive stock options as provided in Section 422 of the Internal Revenue Code of 1986, non-qualified stock options, stock appreciation rights, restricted stock and deferred stock awards. The term of the option, the amount of time for the option to vest after grant, if any, and other terms and limitations will be determined at the time of grant. Options granted under the SIP may not have an exercise period that is more than ten years from the time the option is granted. The maximum number of shares of common stock authorized for issuance under the SIP is 756,356. The SIP provides for appropriate adjustments in the number and kind of shares available for grant or subject to outstanding awards under the SIP to avoid dilution in the event of a merger, stock splits, stock dividends or other changes in the capitalization of the Company. The SIP expires on June 20, 2029. At March 31, 2021, there were 440,805 shares available for issuance under the SIP.

The Company grants shares of restricted stock, under the SIP, to certain members of its Board of Directors as compensation for their services, in accordance with the Company’s Non-employee Directors Compensation program adopted in October 2010. The Company also grants restricted stock to certain officers under individual agreements with these officers. Some of these restricted stock awards vest immediately, while the remainder vest over the service period of three years to nine years. Management recognizes compensation expense for the fair value of the restricted stock awards on a straight-line basis over the requisite service period. Since inception of the plan and through the period ended March 31, 2021, there have been 199,308 awards granted. During the three months ended March 31, 2021 and 2020 there were 12,009 and 32,210 awards granted, respectively. During the three months ended March 31, 2021 and 2020 the Company recognized $246 thousand and $192 thousand in compensation expense for the restricted stock awards, respectively.

Historically, the Company has granted stock options to purchase shares of stock to certain executive officers under individual agreements and/or in accordance with their respective employment agreements. There were no stock options granted for the three months ended March 31, 2021 and 2020, respectively. At March 31, 2021 there was no unrecognized cost remaining for these unexercised options and all outstanding options are fully vested.

Employee Stock Purchase Plan:

On January 1, 2017, the Company implemented the Embassy Bancorp, Inc. Employee Stock Purchase Plan (“ESPP”), which was approved by the Company’s shareholders at the annual meeting held on June 16, 2016. Under the ESPP, each employee of the Company and its subsidiaries who is employed on an offering date and customarily is scheduled to work at least twenty (20) hours per week and more than five (5) months in a calendar year is eligible to participate. The purchase price for shares purchased under the ESPP shall initially equal 95% of the fair market value of such shares on the date of purchase.  The purchase price may be adjusted from time to time by the Board of Directors; provided, however, that the discount to fair market value shall not exceed 15%.  The Company has authorized 350,000 shares of its common stock for the ESPP, of which 16,068 shares have been issued as of March 31, 2021. The Company recognized discount expense in relation to the ESPP of $1 thousand for the three months ended March 31, 2021 and 2020, respectively.

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Other Comprehensive (Loss) Income

3 Months Ended

Mar. 31, 2021

Other Comprehensive (Loss) Income [Abstract]

Other Comprehensive (Loss) Income

Note 10 – Other Comprehensive (Loss) Income

US GAAP requires that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

The components of other comprehensive (loss) income both before tax and net of tax are as follows:

	Three Months Ended March 31,
	2021						2020
	(In Thousands)
	Before		Tax		Net of		Before		Tax		Net of
	Tax		Effect		Tax		Tax		Effect		Tax
Change in accumulated other comprehensive (loss) income:
Unrealized holding (losses) gains on securities ‎   available for sale	$	(2,546)	$	535	$	(2,011)	$	1,803	$	(378)	$	1,425
Reclassification adjustments for gains on securities ‎   transactions included in net income (A),(B)		(24)		5		(19)		-		-		-
Total other comprehensive (loss) income	$	(2,570)	$	540	$	(2,030)	$	1,803	$	(378)	$	1,425

A.Realized gains on securities transactions included in gain on sales of securities in the accompanying Consolidated Statements of Income.

B.Tax effect included in income tax expense in the accompanying Consolidated Statements of Income.

A summary of the realized gains on securities available for sale for the three months ended March 31, 2021 and 2020, net of tax, is as follows:

	Three Months Ended
	March 31,
		2021		2020
		(In Thousands)
Securities available for sale:
Realized gains on securities transactions	$	(24)	$	-
Income taxes		5		-
Net of tax	$	(19)	$	-

‎

A summary of the accumulated other comprehensive income net of tax, is as follows:

	Securities
	Available
	for Sale
Three Months Ended March 31, 2021 and 2020	(In Thousands)
Balance January 1, 2021	$	2,937
Other comprehensive loss before reclassifications		(2,011)
Amounts reclassified from accumulated other ‎   comprehensive income		(19)
Net other comprehensive loss during the period		(2,030)
Balance March 31, 2021	$	907
Balance January 1, 2020	$	1,340
Other comprehensive income before reclassifications		1,425
Amounts reclassified from accumulated other ‎   comprehensive income		-
Net other comprehensive income during the period		1,425
Balance March 31, 2020	$	2,765

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Basic And Diluted Earnings Per Share

3 Months Ended

Mar. 31, 2021

Basic And Diluted Earnings Per Share [Abstract]

Basic And Diluted Earnings Per Share

Note 11 – Basic and Diluted Earnings per Share

Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the period, as adjusted for stock dividends and splits. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustments to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method.

	Three Months Ended
	March 31,
	2021		2020
	(Dollars In Thousands, Except Share and Per Share Data)
Net income	$	4,044	$	2,457
Weighted average shares outstanding		7,532,246		7,443,875
Dilutive effect of potential common shares, stock options		33,235		37,630
Diluted weighted average common shares outstanding		7,565,481		7,481,505
Basic earnings per share	$	0.54	$	0.33
Diluted earnings per share	$	0.53	$	0.33

There were no stock options not considered in computing diluted earnings per common share for the three months ended March 31, 2021. Stock options of 4,227 were not considered in computing diluted earnings per common share for the three months ended March 31, 2020 because to do so would have been anti-dilutive.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2021

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 12 – Fair Value Measurements

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

Fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

US GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy utilized at March 31, 2021 and December 31, 2020, respectively, are as follows:

		(Level 1)		(Level 2)
		Quoted		Significant		(Level 3)
		Prices in Active		Other		Significant
		Markets for		Observable		Unobservable
Description	Identical Assets		Inputs		Inputs		Total
		(In Thousands)
U.S. Government agency obligations	$	-	$	33,327	$	-	$	33,327
Municipal bonds		-		44,245		-		44,245
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		527		-		527
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		85,985		-		85,985
March 31, 2021 Securities available for sale	$	-	$	164,084	$	-	$	164,084
U.S. Treasury securities	$	-	$	9,998	$	-	$	9,998
U.S. Government agency obligations		-		39,036		-		39,036
Municipal bonds		-		39,376		-		39,376
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		543		-		543
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		41,987		-		41,987
December 31, 2020 Securities available for sale	$	-	$	130,940	$	-	$	130,940

The fair value of securities available for sale are determined by matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted prices. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer

quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the security’s terms and conditions, among other things.

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2021 and December 31, 2020, respectively, are as follows:

		(Level 1)		(Level 2)
		Quoted		Significant		(Level 3)
		Prices in Active		Other		Significant
		Markets for		Observable		Unobservable
Description	Identical Assets		Inputs		Inputs		Total
		(In Thousands)
March 31, 2021 Impaired loans	$	-	$	-	$	1,354	$	1,354
December 31, 2020 Impaired loans	$	-	$	-	$	1,361	$	1,361

Impaired loans are those that are accounted for under existing FASB guidance, in which the Bank has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. Fair values may also include qualitative adjustments by management based on economic conditions and liquidation expenses. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

At March 31, 2021, of the impaired loans having an aggregate balance of $4.0 million, $2.5 million did not require a valuation allowance because the value of the collateral, including estimated selling costs, securing the loan was determined to meet or exceed the balance owed on the loan. Of the remaining $1.5 million in impaired loans, an aggregate valuation allowance of $160 thousand was required to reflect what was determined to be a shortfall in the value of the collateral as compared to the balance on such loans.

Real estate properties acquired through, or in lieu of, foreclosure are to be sold and are carried at fair value less estimated cost to sell. Fair value is based upon independent market prices or appraised value of the property. These assets would be included in Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement. At March 31, 2021 and December 31, 2020, respectively, the Company had no real estate properties acquired through, or in lieu of, foreclosure.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Quantitative Information about Level 3 Fair Value Measurements
Description	Fair Value ‎Estimate		Valuation Techniques	Unobservable Input	Range ‎(Weighted Average)
		(Dollars In Thousands)
March 31, 2021:
Impaired loans	$	1,354	Appraisal of collateral and	Appraisal adjustments (1)	0% to -25% (-15.1%)
			pending agreement of sale	Liquidation expenses (2)	0% to -10.0% (-8.5%)
December 31, 2020:
Impaired loans	$	1,361	Appraisal of collateral and	Appraisal adjustments (1)	0% to -25% (-15.1%)
			pending agreement of sale	Liquidation expenses (2)	0% to -10.0% (-8.5%)

1.Appraisals may be adjusted by management for qualitative factors including economic conditions and the age of the appraisal. The range and weighted average of appraisal adjustments are presented as a percent of the appraisal.

2.Appraisals and pending agreements of sale are adjusted by management for liquidation expenses. The range and weighted average of liquidation expense adjustments are presented as a percent of the appraisal or pending agreement of sale.

‎

The estimated fair values of the Company’s financial instruments were as follows at March 31, 2021 and December 31, 2020:

						(Level 1)
						Quoted		(Level 2)
						Prices in		Significant		(Level 3)
						Active		Other		Significant
		Carrying		Fair Value		Markets for		Observable		Unobservable
		Amount		Estimate		Identical Assets		Inputs		Inputs
	(In Thousands)
March 31, 2021:
Financial assets:
Cash and cash equivalents	$	120,114	$	120,114	$	120,114	$	-	$	-
Securities available-for-sale		164,084		164,084		-		164,084		-
Loans receivable, net of allowance		1,087,756		1,139,248		-		-		1,139,248
Paycheck Protection Program loans receivable		47,714		47,938		-		-		47,938
Restricted investments in bank stock		1,330		1,330		-		1,330		-
Accrued interest receivable		3,114		3,114		-		3,114		-
Financial liabilities:
Deposits		1,305,608		1,308,187		-		1,308,187		-
Securities sold under agreements to
repurchase and federal funds purchased		9,594		9,594		-		9,594		-
Long-term borrowings		14,651		14,694		-		-		14,694
Accrued interest payable		1,069		1,069		-		1,069		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-
December 31, 2020:
Financial assets:
Cash and cash equivalents	$	131,907	$	131,907	$	131,907	$	-	$	-
Securities available-for-sale		130,940		130,940		-		13,940		-
Loans receivable, net of allowance		1,079,339		1,158,545		-		-		1,158,545
Paycheck Protection Program loans receivable		54,334		54,632				-		54,632
Restricted investments in bank stock		1,330		1,330		-		1,330		-
Accrued interest receivable		3,136		3,136		-		3,136		-
Financial liabilities:
Deposits		1,232,379		1,235,483		-		1,235,483		-
Securities sold under agreements to
repurchase and federal funds purchased		13,612		13,612		-		13,612		-
Long-term borrowings		14,651		14,707		-		-		14,707
Paycheck Protection Program
Liquidity Facility		50,794		50,810				-		50,810
Accrued interest payable		1,640		1,640		-		1,640		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-

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Future Accounting Standards

3 Months Ended

Mar. 31, 2021

Future Accounting Standards [Abstract]

Future Accounting Standards

‎

Note 13 – Future Accounting Standards

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses”. ASU 2016-13 requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In November 2019, the FASB issued an update to defer the implementation date for smaller reporting companies from 2020 to 2023. The Company currently qualifies as a smaller reporting company under SEC Regulation S-K and, therefore, the guidance is effective for the Company in 2023. The Company has not yet determined the impact this standard will have on its consolidated financial statements or its results of operations.

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Basis Of Presentation (Policy)

3 Months Ended

Mar. 31, 2021

Basis Of Presentation [Abstract]

Consolidation

Embassy Bancorp, Inc. (the “Company”) is a Pennsylvania corporation organized in 2008 and registered as a bank holding company pursuant to the Bank Holding Company Act of 1956, as amended (the “BHC Act”). The Company was formed for purposes of acquiring Embassy Bank For The Lehigh Valley (the “Bank”) in connection with the reorganization of the Bank into a bank holding company structure, which was consummated on November 11, 2008. Accordingly, the Company owns all of the capital stock of the Bank, giving the organization more flexibility in meeting its capital needs as the Company continues to grow. Embassy Holdings, LLC (the “LLC”) is a wholly-owned subsidiary of the Bank organized to engage in the holding of property acquired by the Bank in satisfaction of debts previously contracted. As such, the consolidated financial statements contained herein include the accounts of the Company, the Bank and the LLC. All significant intercompany transactions and balances have been eliminated.

The Bank, which is the Company’s principal operating subsidiary, was originally incorporated as a Pennsylvania bank on May 11, 2001 and opened its doors on November 6, 2001. It was formed by a group of local business persons and professionals with significant prior experience in community banking in the Lehigh Valley area of Pennsylvania, the Bank’s primary market area.

Basis Of Accounting

The accompanying unaudited financial statements have been prepared in accordance with United States of America generally accepted accounting principles (“US GAAP”) for interim financial information and in accordance with instructions for Form 10-Q and Rule 10-01 of the Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

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COVID-19 (Tables)

3 Months Ended

Mar. 31, 2021

COVID-19 [Abstract]

Schedule Of COVID-19 Payment Accommodations Based On Loan Type And Amount

	March 31, 2021
	Number of Loans - Payment Accommodation Period Ended	Number of Loans - Payment Accommodation Period Active	Total Number of Loans		Loan Amount - Payment Accommodation Period Ended		Loan Amount - Payment Accommodation Period Active	Total Loan Amount
	(Dollars In Thousands)
Commercial real estate	128	4	132	$	110,298	$	16,538	$	126,836
Commercial	40	-	40		6,636		-		6,636
Residential real estate	67	-	67		13,708		-		13,708
Consumer	2	-	2		29		-		29
Total	237	4	241	$	130,671	$	16,538	$	147,209
	December 31, 2020
	Number of Loans - Payment Accommodation Period Ended	Number of Loans - Payment Accommodation Period Active	Total Number of Loans		Loan Amount - Payment Accommodation Period Ended		Loan Amount - Payment Accommodation Period Active	Total Loan Amount
	(Dollars In Thousands)
Commercial real estate	130	7	137	$	112,016	$	16,830	$	128,846
Commercial	43	1	44		7,445		752		8,197
Residential real estate	68	4	72		13,517		717		14,234
Consumer	2	-	2		31		-		31
Total	243	12	255	$	133,009	$	18,299	$	151,308

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Securities Available For Sale (Tables)

3 Months Ended

Mar. 31, 2021

Securities Available For Sale [Abstract]

Amortized Cost And Fair Values Of Securities Available-For-Sale

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
March 31, 2021:
U.S. Government agency obligations	$	33,392	$	1	$	(66)	$	33,327
Municipal bonds		43,192		1,286		(233)		44,245
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		512		15		-		527
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		85,840		1,349		(1,204)		85,985
Total	$	162,936	$	2,651	$	(1,503)	$	164,084
December 31, 2020:
U.S. Treasury securities	$	9,998	$	-	$	-	$	9,998
U.S. Government agency obligations		39,059		1		(24)		39,036
Municipal bonds		37,409		1,967		-		39,376
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		512		31		-		543
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		40,244		1,743		-		41,987
Total	$	127,222	$	3,742	$	(24)	$	130,940

Securities Available-For-Sale By Contractual Maturity

		Amortized		Fair
		Cost		Value
	(In Thousands)
Due in one year or less	$	4,623	$	4,624
Due after one year through five years		30,830		30,771
Due after five years through ten years		8,301		8,632
Due after ten years		32,830		33,545
		76,584		77,572
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - commercial		512		527
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - residential		85,840		85,985
Total	$	162,936	$	164,084

Investments' Gross Unrealized Losses And Fair Value

		Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2021:	(In Thousands)
U.S. Government agency obligations	$	20,094	$	(66)	$	-	$	-	$	20,094	$	(66)
Municipal bonds		7,117		(233)		-		-		7,117		(233)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
residential		53,169		(1,204)		-		-		53,169		(1,204)
Total Temporarily Impaired Securities	$	80,380	$	(1,503)	$	-	$	-	$	80,380	$	(1,503)
		.
December 31, 2020:
U.S. Government agency obligations	$	31,369	$	(24)	$	-	$	-	$	31,369	$	(24)
Total Temporarily Impaired Securities	$	31,369	$	(24)	$	-	$	-	$	31,369	$	(24)

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Loans And Credit Quality (Tables)

3 Months Ended

Mar. 31, 2021

Loans And Credit Quality [Abstract]

Composition Of Loans Receivable

	March 31, 2021			December 31, 2020
			Percentage of			Percentage of
	Balance		total Loans	Balance		total Loans
		(Dollars in Thousands)
Commercial real estate	$	461,331	41.99%	$	452,251	41.51%
Commercial construction		10,264	0.93%		12,176	1.12%
Commercial		44,650	4.06%		48,114	4.42%
Residential real estate		581,765	52.97%		576,437	52.90%
Consumer		603	0.05%		640	0.05%
Total loans		1,098,613	100.00%		1,089,618	100.00%
Unearned origination fees		178			291
Allowance for loan losses		(11,034)			(10,570)
Net Loans	$	1,087,757		$	1,079,339

Schedule Of Loan Portfolio By Aggregate Risk Rating

	Pass		Special Mention		Substandard		Doubtful		Total
March 31, 2021		(In Thousands)
Commercial real estate	$	459,916	$	-	$	1,415	$	-	$	461,331
Commercial construction		9,949		-		315		-		10,264
Commercial		44,650		-		-		-		44,650
Residential real estate		580,267		506		992		-		581,765
Consumer		603		-		-		-		603
Total	$	1,095,385	$	506	$	2,722	$	-	$	1,098,613
December 31, 2020
Commercial real estate	$	450,823	$	-	$	1,428	$	-	$	452,251
Commercial construction		11,861		-		315		-		12,176
Commercial		48,114		-		-		-		48,114
Residential real estate		575,344		512		581		-		576,437
Consumer		640		-		-		-		640
Total	$	1,086,782	$	512	$	2,324	$	-	$	1,089,618

Schedule Of Impaired Loans

‎

The following table summarizes information in regards to impaired loans by loan portfolio class as of March 31, 2021 and December 31, 2020, respectively:

	March 31, 2021						December 31, 2020
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In Thousands)
With no related allowance recorded:
Commercial real estate	$	840	$	1,080			$	851	$	1,091
Commercial construction		315		315				315		315
Commercial		-		-				-		-
Residential real estate		1,351		1,421				944		1,014
Consumer		-		-				-		-
With an allowance recorded:
Commercial real estate	$	690	$	690	$	15	$	696	$	696	$	21
Commercial construction		-		-		-		-		-		-
Commercial		228		228		22		230		230		23
Residential real estate		596		596		123		604		604		125
Consumer		-		-		-		-		-		-
Total:
Commercial real estate	$	1,530	$	1,770	$	15	$	1,547	$	1,787	$	21
Commercial construction		315		315		-		315		315		-
Commercial		228		228		22		230		230		23
Residential real estate		1,947		2,017		123		1,548		1,618		125
Consumer		-		-		-		-		-		-
	$	4,020	$	4,330	$	160	$	3,640	$	3,950	$	169

‎

The following tables summarize information regarding the average recorded investment and interest income recognized on impaired loans by loan portfolio for the three months ended March 31, 2021 and 2020, respectively:

	Three Months Ended March 31,
	2021				2020
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In Thousands)
With no related allowance recorded:
Commercial real estate	$	846	$	15	$	1,257	$	13
Commercial construction		315		3		315		3
Commercial		-		-		-		-
Residential real estate		1,148		7		619		7
Consumer		-		-		-		-
With an allowance recorded:
Commercial real estate	$	693	$	7	$	350	$	6
Commercial construction		-		-		-		-
Commercial		229		2		234		2
Residential real estate		600		5		720		5
Consumer		-		-		-		-
Total:
Commercial real estate	$	1,539	$	22	$	1,607	$	19
Commercial construction		315		3		315		3
Commercial		229		2		234		2
Residential real estate		1,748		12		1,339		12
Consumer		-		-		-		-
	$	3,831	$	39	$	3,495	$	36

Schedule Of Nonaccrual Loans

	March 31, 2021		December 31, 2020
	(In Thousands)
Commercial real estate	$	-	$	-
Commercial construction		-		-
Commercial		-		-
Residential real estate		692		274
Consumer		-		-
Total	$	692	$	274

Schedule Of Past Due Loans

					Greater								Loan
					than								Receivables >
	30-59 Days		60-89 Days		90 Days		Total				Total Loan		90 Days and
	Past Due		Past Due		Past Due		Past Due		Current		Receivables		Accruing
March 31, 2021	(In Thousands)
Commercial real estate	$	-	$	-	$	-	$	-	$	461,331	$	461,331	$	-
Commercial construction		-		-		-		-		10,264		10,264		-
Commercial		-		-		-		-		44,650		44,650		-
Residential real estate		74		154		259		487		581,278		581,765		-
Consumer		-		-		-		-		603		603		-
Total	$	74	$	154	$	259	$	487	$	1,098,126	$	1,098,613	$	-
December 31, 2020
Commercial real estate	$	514	$	-	$	-	$	514	$	451,737	$	452,251	$	-
Commercial construction		-		-		-		-		12,176		12,176		-
Commercial		-		-		-		-		48,114		48,114		-
Residential real estate		336		-		42		378		576,059		576,437		-
Consumer		2		-		-		2		638		640		-
Total	$	852	$	-	$	42	$	894	$	1,088,724	$	1,089,618	$	-

Activity In Allowance For Loan Losses

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses	(In Thousands)
Three Months Ending March 31, 2021
Beginning Balance - December 31, 2020	$	4,379	$	150	$	848	$	4,485	$	14	$	694	$	10,570
Charge-offs		-		-		-		-		(2)		-		(2)
Recoveries		-		-		-		1		-		-		1
Provisions		308		(37)		68		11		-		115		465
Ending Balance - March 31, 2021	$	4,687	$	113	$	916	$	4,497	$	12	$	809	$	11,034
Three Months Ending March 31, 2020
Beginning Balance - December 31, 2019	$	3,221	$	121	$	770	$	3,488	$	19	$	403	$	8,022
Charge-offs		-		-		-		-		-		-		-
Recoveries		24		-		-		-		-		-		24
Provisions		108		-		47		139		(1)		27		320
Ending Balance - March 31, 2020	$	3,353	$	121	$	817	$	3,627	$	18	$	430	$	8,366

Allocation Of Allowance For Loan Losses And Related Loan Portfolio

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
	(In Thousands)
March 31, 2021
Allowance for Loan Losses
Ending Balance	$	4,687	$	113	$	916	$	4,497	$	12	$	809	$	11,034
Ending balance: individually evaluated for impairment	$	15	$	-	$	22	$	123	$	-	$	-	$	160
Ending balance: collectively evaluated for impairment	$	4,672	$	113	$	894	$	4,374	$	12	$	809	$	10,874
Loans receivables:
Ending balance	$	461,331	$	10,264	$	44,650	$	581,765	$	603			$	1,098,613
Ending balance: individually evaluated for impairment	$	1,530	$	315	$	228	$	1,947	$	-			$	4,020
Ending balance: collectively evaluated for impairment	$	459,801	$	9,949	$	44,422	$	579,818	$	603			$	1,094,593
December 31, 2020
Allowance for Loan Losses
Ending Balance	$	4,379	$	150	$	848	$	4,485	$	14	$	694	$	10,570
Ending balance: individually evaluated for impairment	$	21	$	-	$	23	$	125	$	-	$	-	$	169
Ending balance: collectively evaluated for impairment	$	4,358	$	150	$	825	$	4,360	$	14	$	694	$	10,401
Loans receivables:
Ending balance	$	452,251	$	12,176	$	48,114	$	576,437	$	640			$	1,089,618
Ending balance: individually evaluated for impairment	$	1,547	$	315	$	230	$	1,548	$	-			$	3,640
Ending balance: collectively evaluated for impairment	$	450,704	$	11,861	$	47,884	$	574,889	$	640			$	1,085,978

Troubled Debt Restructuring Outstanding

	Accrual Loans		Non-Accrual Loans		Total Modifications
March 31, 2021	(In Thousands)
Commercial real estate	$	1,113	$	-	$	1,113
Commercial construction		260		-		260
Commercial		228		-		228
Residential real estate		930		14		944
Consumer		-		-		-
	$	2,531	$	14	$	2,545
December 31, 2020
Commercial real estate	$	1,125	$	-	$	1,125
Commercial construction		260		-		260
Commercial		230		-		230
Residential real estate		944		15		959
Consumer		-		-		-
	$	2,559	$	15	$	2,574

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Deposits (Tables)

3 Months Ended

Mar. 31, 2021

Deposits [Abstract]

Components Of Deposits

	March 31,		December 31,
	2021		2020
	(In Thousands)
Demand, non-interest bearing	$	291,411	$	269,996
Demand, NOW and money market, interest bearing		219,254		199,845
Savings		591,176		546,784
Time, $250 and over		78,267		85,272
Time, other		125,500		130,482
Total deposits	$	1,305,608	$	1,232,379

Scheduled Maturities of Time Deposits

2021 (remainder of the year)	$	111,820
2022		50,680
2023		33,776
2024		5,647
2025		1,258
2026		586
	$	203,767

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Short-Term And Long-Term Borrowings (Tables)

3 Months Ended

Mar. 31, 2021

Federal Home Loan Bank [Member]

Components Of Long-Term Borrowings With FHLB

	March 31, 2021
	(Dollars in Thousands)
Maturity Date	Interest Rate		Outstanding
March 2022	0.79%	$	10,000
March 2022	0.64%		2,663
March 2022	0.61%		1,988
Total FHLB Outstanding Borrowings		$	14,651

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Other Comprehensive (Loss) Income (Tables)

3 Months Ended

Mar. 31, 2021

Other Comprehensive (Loss) Income [Abstract]

Components Of Other Comprehensive Income, Both Before Tax And Net Of Tax

	Three Months Ended March 31,
	2021						2020
	(In Thousands)
	Before		Tax		Net of		Before		Tax		Net of
	Tax		Effect		Tax		Tax		Effect		Tax
Change in accumulated other comprehensive (loss) income:
Unrealized holding (losses) gains on securities ‎   available for sale	$	(2,546)	$	535	$	(2,011)	$	1,803	$	(378)	$	1,425
Reclassification adjustments for gains on securities ‎   transactions included in net income (A),(B)		(24)		5		(19)		-		-		-
Total other comprehensive (loss) income	$	(2,570)	$	540	$	(2,030)	$	1,803	$	(378)	$	1,425

A.Realized gains on securities transactions included in gain on sales of securities in the accompanying Consolidated Statements of Income.

B.Tax effect included in income tax expense in the accompanying Consolidated Statements of Income.

Summary Of Realized Gains On Securities Available For Sale, Net Of Tax

	Three Months Ended
	March 31,
		2021		2020
		(In Thousands)
Securities available for sale:
Realized gains on securities transactions	$	(24)	$	-
Income taxes		5		-
Net of tax	$	(19)	$	-

Summary Of Accumulated Other Comprehensive Income, Net Of Tax

	Securities
	Available
	for Sale
Three Months Ended March 31, 2021 and 2020	(In Thousands)
Balance January 1, 2021	$	2,937
Other comprehensive loss before reclassifications		(2,011)
Amounts reclassified from accumulated other ‎   comprehensive income		(19)
Net other comprehensive loss during the period		(2,030)
Balance March 31, 2021	$	907
Balance January 1, 2020	$	1,340
Other comprehensive income before reclassifications		1,425
Amounts reclassified from accumulated other ‎   comprehensive income		-
Net other comprehensive income during the period		1,425
Balance March 31, 2020	$	2,765

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Basic And Diluted Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2021

Basic And Diluted Earnings Per Share [Abstract]

Earnings Per Share

	Three Months Ended
	March 31,
	2021		2020
	(Dollars In Thousands, Except Share and Per Share Data)
Net income	$	4,044	$	2,457
Weighted average shares outstanding		7,532,246		7,443,875
Dilutive effect of potential common shares, stock options		33,235		37,630
Diluted weighted average common shares outstanding		7,565,481		7,481,505
Basic earnings per share	$	0.54	$	0.33
Diluted earnings per share	$	0.53	$	0.33

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Measurements [Abstract]

Fair Value Of Financial Assets Measured On Recurring Basis

		(Level 1)		(Level 2)
		Quoted		Significant		(Level 3)
		Prices in Active		Other		Significant
		Markets for		Observable		Unobservable
Description	Identical Assets		Inputs		Inputs		Total
		(In Thousands)
U.S. Government agency obligations	$	-	$	33,327	$	-	$	33,327
Municipal bonds		-		44,245		-		44,245
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		527		-		527
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		85,985		-		85,985
March 31, 2021 Securities available for sale	$	-	$	164,084	$	-	$	164,084
U.S. Treasury securities	$	-	$	9,998	$	-	$	9,998
U.S. Government agency obligations		-		39,036		-		39,036
Municipal bonds		-		39,376		-		39,376
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		543		-		543
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		41,987		-		41,987
December 31, 2020 Securities available for sale	$	-	$	130,940	$	-	$	130,940

Fair Value Of Financial Assets Measured On Nonrecurring Basis

		(Level 1)		(Level 2)
		Quoted		Significant		(Level 3)
		Prices in Active		Other		Significant
		Markets for		Observable		Unobservable
Description	Identical Assets		Inputs		Inputs		Total
		(In Thousands)
March 31, 2021 Impaired loans	$	-	$	-	$	1,354	$	1,354
December 31, 2020 Impaired loans	$	-	$	-	$	1,361	$	1,361

Quantitative Information About Level 3 Fair Value Measurements

	Quantitative Information about Level 3 Fair Value Measurements
Description	Fair Value ‎Estimate		Valuation Techniques	Unobservable Input	Range ‎(Weighted Average)
		(Dollars In Thousands)
March 31, 2021:
Impaired loans	$	1,354	Appraisal of collateral and	Appraisal adjustments (1)	0% to -25% (-15.1%)
			pending agreement of sale	Liquidation expenses (2)	0% to -10.0% (-8.5%)
December 31, 2020:
Impaired loans	$	1,361	Appraisal of collateral and	Appraisal adjustments (1)	0% to -25% (-15.1%)
			pending agreement of sale	Liquidation expenses (2)	0% to -10.0% (-8.5%)

1.Appraisals may be adjusted by management for qualitative factors including economic conditions and the age of the appraisal. The range and weighted average of appraisal adjustments are presented as a percent of the appraisal.

2.Appraisals and pending agreements of sale are adjusted by management for liquidation expenses. The range and weighted average of liquidation expense adjustments are presented as a percent of the appraisal or pending agreement of sale.

Estimated Fair Value Of Financial Instruments

						(Level 1)
						Quoted		(Level 2)
						Prices in		Significant		(Level 3)
						Active		Other		Significant
		Carrying		Fair Value		Markets for		Observable		Unobservable
		Amount		Estimate		Identical Assets		Inputs		Inputs
	(In Thousands)
March 31, 2021:
Financial assets:
Cash and cash equivalents	$	120,114	$	120,114	$	120,114	$	-	$	-
Securities available-for-sale		164,084		164,084		-		164,084		-
Loans receivable, net of allowance		1,087,756		1,139,248		-		-		1,139,248
Paycheck Protection Program loans receivable		47,714		47,938		-		-		47,938
Restricted investments in bank stock		1,330		1,330		-		1,330		-
Accrued interest receivable		3,114		3,114		-		3,114		-
Financial liabilities:
Deposits		1,305,608		1,308,187		-		1,308,187		-
Securities sold under agreements to
repurchase and federal funds purchased		9,594		9,594		-		9,594		-
Long-term borrowings		14,651		14,694		-		-		14,694
Accrued interest payable		1,069		1,069		-		1,069		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-
December 31, 2020:
Financial assets:
Cash and cash equivalents	$	131,907	$	131,907	$	131,907	$	-	$	-
Securities available-for-sale		130,940		130,940		-		13,940		-
Loans receivable, net of allowance		1,079,339		1,158,545		-		-		1,158,545
Paycheck Protection Program loans receivable		54,334		54,632				-		54,632
Restricted investments in bank stock		1,330		1,330		-		1,330		-
Accrued interest receivable		3,136		3,136		-		3,136		-
Financial liabilities:
Deposits		1,232,379		1,235,483		-		1,235,483		-
Securities sold under agreements to
repurchase and federal funds purchased		13,612		13,612		-		13,612		-
Long-term borrowings		14,651		14,707		-		-		14,707
Paycheck Protection Program
Liquidity Facility		50,794		50,810				-		50,810
Accrued interest payable		1,640		1,640		-		1,640		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-

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COVID-19 (Narrative) (Details)			1 Months Ended	3 Months Ended		12 Months Ended
	Apr. 30, 2021 USD ($) loan	Feb. 03, 2021 USD ($)	Apr. 30, 2021 USD ($) loan	Mar. 31, 2021 USD ($) loan	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($) loan
Loans amount				$ 1,098,613,000		$ 1,089,618,000
PPPLF borrowings						50,794,000
Repayment of PPPLF borrowings				50,794,000
Increase in allowance for loan losses				464,000
Loans receivable, allowance				$ 11,034,000		$ 10,570,000
Percentage of allowance for loan losses				1.00%		0.97%
Percentage of nonperforming loans to total loans receivable				0.29%	0.25%	0.26%
Percentage of loan portfolio collateralized by real estate				95.00%
Charge-offs				$ 2,000	$ 0
Percentage of loan portfolio to borrowers in the more particularly hard-hit industries				6.00%
CARES Act [Member]
Number of PPP loans | loan				357		470
PPP loan receivable amount for which SBA loan guarantee approval received				$ 47,700,000		$ 54,300,000
Net deferred PPP loan fees and costs				1,400,000		1,200,000
Proceeds from forgiveness payments on PPP loans from SBA				$ 36,200,000
PPP loans guarantee percent by the SBA				100.00%
Interest rate on PPP loans				1.00%
Percentage of proceeds customers use for payroll costs to qualify for SBA loan forgiveness				60.00%
PPPLF borrowings						50,800,000
Repayment of PPPLF borrowings		$ 50,800,000
Loans receivable, allowance				$ 0
Commercial [Member]
Loans amount				44,650,000		48,114,000
Consumer [Member]
Loans amount				603,000		640,000
Charge-offs				2,000
Substandard [Member]
Loans amount				$ 2,722,000		$ 2,324,000
Minimum [Member] | CARES Act [Member]
PPP loans maturity term				2 years
Maximum [Member] | CARES Act [Member]
PPP loans maturity term				5 years
Section 4013 Loan [Member] | Fourth Short-term (Three Month) Payment Accommodation [Member] | Commercial [Member] | CARES Act [Member]
Number of loans included in COVID-19 payment accommodations | loan				4
Loans amount				$ 16,500,000
Section 4013 Loan [Member] | Fourth Short-term (Three Month) Payment Accommodation [Member] | Commercial [Member] | Travel And Hotel Industry [Member] | CARES Act [Member]
Loans amount				11,400,000
Section 4013 Loan [Member] | Fourth Short-term (Three Month) Payment Accommodation [Member] | Commercial [Member] | Assisted Living Facility Industry [Member] | CARES Act [Member]
Loans amount				$ 3,800,000
Section 4013 Loan [Member] | Fourth Short-term (Three Month) Payment Accommodation [Member] | Commercial [Member] | Restaurant Industry [Member] | CARES Act [Member]
Number of loans included in COVID-19 payment accommodations | loan				2
Loans amount				$ 1,400,000
Section 4013 Loan [Member] | Payment Accommodations Period Ended [Member] | CARES Act [Member]
Number of loans included in COVID-19 payment accommodations | loan				236
Loans amount				$ 130,300,000
Section 4013 Loan [Member] | Payment Accommodations Period Ended [Member] | Substandard [Member] | Consumer [Member] | CARES Act [Member]
Number of loans included in COVID-19 payment accommodations | loan				1
Loans amount				$ 418,000
New Section 4013 Loan [Member] | CARES Act [Member]
Number of loans included in COVID-19 payment accommodations | loan				0
New PPP Loans [Member] | CARES Act [Member]
Number of PPP loans | loan				273
PPP loan receivable amount for which SBA loan guarantee approval received				$ 28,600,000
Net deferred PPP loan fees and costs				$ 1,200,000
Subsequent Event [Member] | CARES Act [Member]
Number of PPP loans | loan	355
PPP loan receivable amount for which SBA loan guarantee approval received	$ 43,600,000		$ 43,600,000
Net deferred PPP loan fees and costs	$ 1,400,000		1,400,000
Subsequent Event [Member] | Section 4013 Loan [Member] | CARES Act [Member]
Number of loans included in COVID-19 payment accommodations | loan	236
Loans amount	$ 144,700,000		144,700,000
Subsequent Event [Member] | Section 4013 Loan [Member] | Substandard [Member] | Consumer [Member] | CARES Act [Member]
Number of loans included in COVID-19 payment accommodations | loan	1
Loans amount	$ 418,000		$ 418,000
Subsequent Event [Member] | Section 4013 Loan [Member] | Payment Accommodations Period Ended [Member] | Commercial [Member] | CARES Act [Member]
Number of loans included in COVID-19 payment accommodations | loan	4
Subsequent Event [Member] | New Section 4013 Loan [Member] | CARES Act [Member]
Number of loans included in COVID-19 payment accommodations | loan	0
Subsequent Event [Member] | New PPP Loans [Member] | CARES Act [Member]
Number of PPP loans | loan			48
PPP loan receivable amount for which SBA loan guarantee approval received	$ 2,200,000		$ 2,200,000
Net deferred PPP loan fees and costs	$ 141,000		141,000
Proceeds from forgiveness payments on PPP loans from SBA			$ 6,500,000

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COVID-19 (Schedule Of COVID-19 Payment Accommodations Based On Loan Type And Amount) (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021 USD ($) loan	Dec. 31, 2020 USD ($) loan
Loans amount	$ 1,098,613	$ 1,089,618
Commercial real estate [Member]
Loans amount	461,331	452,251
Commercial [Member]
Loans amount	44,650	48,114
Residential real estate [Member]
Loans amount	581,765	576,437
Consumer [Member]
Loans amount	$ 603	$ 640
COVID-19 CARES Act Section 4013 Loans [Member]
Number of Loans | loan	241	255
Loans amount	$ 147,209	$ 151,308
COVID-19 CARES Act Section 4013 Loans [Member] | Commercial real estate [Member]
Number of Loans | loan	132	137
Loans amount	$ 126,836	$ 128,846
COVID-19 CARES Act Section 4013 Loans [Member] | Commercial [Member]
Number of Loans | loan	40	44
Loans amount	$ 6,636	$ 8,197
COVID-19 CARES Act Section 4013 Loans [Member] | Residential real estate [Member]
Number of Loans | loan	67	72
Loans amount	$ 13,708	$ 14,234
COVID-19 CARES Act Section 4013 Loans [Member] | Consumer [Member]
Number of Loans | loan	2	2
Loans amount	$ 29	$ 31
COVID-19 CARES Act Section 4013 Loans [Member] | Loans Payment Accommodation Period Ended [Member]
Number of Loans | loan	237	243
Loans amount	$ 130,671	$ 133,009
COVID-19 CARES Act Section 4013 Loans [Member] | Loans Payment Accommodation Period Ended [Member] | Commercial real estate [Member]
Number of Loans | loan	128	130
Loans amount	$ 110,298	$ 112,016
COVID-19 CARES Act Section 4013 Loans [Member] | Loans Payment Accommodation Period Ended [Member] | Commercial [Member]
Number of Loans | loan	40	43
Loans amount	$ 6,636	$ 7,445
COVID-19 CARES Act Section 4013 Loans [Member] | Loans Payment Accommodation Period Ended [Member] | Residential real estate [Member]
Number of Loans | loan	67	68
Loans amount	$ 13,708	$ 13,517
COVID-19 CARES Act Section 4013 Loans [Member] | Loans Payment Accommodation Period Ended [Member] | Consumer [Member]
Number of Loans | loan	2	2
Loans amount	$ 29	$ 31
COVID-19 CARES Act Section 4013 Loans [Member] | Loans Payment Accommodation Period Active [Member]
Number of Loans | loan	4	12
Loans amount	$ 16,538	$ 18,299
COVID-19 CARES Act Section 4013 Loans [Member] | Loans Payment Accommodation Period Active [Member] | Commercial real estate [Member]
Number of Loans | loan	4	7
Loans amount	$ 16,538	$ 16,830
COVID-19 CARES Act Section 4013 Loans [Member] | Loans Payment Accommodation Period Active [Member] | Commercial [Member]
Number of Loans | loan		1
Loans amount		$ 752
COVID-19 CARES Act Section 4013 Loans [Member] | Loans Payment Accommodation Period Active [Member] | Residential real estate [Member]
Number of Loans | loan		4
Loans amount		$ 717

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Securities Available For Sale (Narrative) (Details)	3 Months Ended
	Mar. 31, 2021 USD ($) security	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($) security
Securities Available For Sale [Abstract]
Sale of securities		$ 0
Securities pledged as collateral	$ 106,100,000		$ 98,700,000
Realized gross gains	24,000
Realized losses	$ 0
Securities in an unrealized loss position | security	21		5

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Securities Available For Sale (Amortized Cost And Fair Values Of Securities Available-For-Sale) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 162,936	$ 127,222
Gross Unrealized Gains	2,651	3,742
Gross Unrealized Losses	(1,503)	(24)
Fair Value	164,084	130,940
US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost		9,998
Fair Value		9,998
U.S Government Agency Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	33,392	39,059
Gross Unrealized Gains	1	1
Gross Unrealized Losses	(66)	(24)
Fair Value	33,327	39,036
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	43,192	37,409
Gross Unrealized Gains	1,286	1,967
Gross Unrealized Losses	(233)
Fair Value	44,245	39,376
U.S. GSE - Mortgage-backed Securities [Member] | Commercial RealEstate [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	512	512
Gross Unrealized Gains	15	31
Fair Value	527	543
U.S. GSE - Mortgage-backed Securities [Member] | Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	85,840	40,244
Gross Unrealized Gains	1,349	1,743
Gross Unrealized Losses	(1,204)
Fair Value	$ 85,985	$ 41,987

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Securities Available For Sale (Securities Available-For-Sale By Contractual Maturity) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Due in one year or less	$ 4,623
Amortized Cost, Due after one year through five years	30,830
Amortized Cost, Due after five years through ten years	8,301
Amortized Cost, Due after ten years	32,830
Amortized Cost, Debt Maturities, Total	76,584
Amortized Cost	162,936	$ 127,222
Fair Value, Due in one year or less	4,624
Fair Value, Due after one year through five years	30,771
Fair Value, Due after five years through ten years	8,632
Fair Value, Due after ten years	33,545
Fair Value, Debt maturities, Total	77,572
Fair Value, Total	164,084	130,940
U.S. GSE - Mortgage-backed Securities [Member] | Commercial RealEstate [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities	512
Amortized Cost	512	512
Fair Value, U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities	527
Fair Value, Total	527	543
U.S. GSE - Mortgage-backed Securities [Member] | Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities	85,840
Amortized Cost	85,840	40,244
Fair Value, U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities	85,985
Fair Value, Total	$ 85,985	$ 41,987

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Securities Available For Sale (Investments' Gross Unrealized Losses And Fair Value) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	$ 80,380	$ 31,369
Fair Value, Total	80,380	31,369
Unrealized Losses, Less Than 12 Months	(1,503)	(24)
Unrealized Losses, Total	(1,503)	(24)
U.S Government Agency Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	20,094	31,369
Fair Value, Total	20,094	31,369
Unrealized Losses, Less Than 12 Months	(66)	(24)
Unrealized Losses, Total	(66)	$ (24)
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	7,117
Fair Value, Total	7,117
Unrealized Losses, Less Than 12 Months	(233)
Unrealized Losses, Total	(233)
Residential [Member] | U.S. GSE - Mortgage-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	53,169
Fair Value, Total	53,169
Unrealized Losses, Less Than 12 Months	(1,204)
Unrealized Losses, Total	$ (1,204)

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Restricted Investment In Bank Stock (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Federal Home Loan Bank of Pittsburgh [Member]
Investment stock at a carrying value	$ 1,300	$ 1,300
Atlantic Community Bankers Bank (ACBB) [Member
Investment stock at a carrying value	$ 40	$ 40

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Loans And Credit Quality (Narrative) (Details)	3 Months Ended
	Mar. 31, 2021 USD ($) loan	Mar. 31, 2020 loan	Dec. 31, 2020 USD ($)
Financing Receivable, Modifications [Line Items]
Available commitments outstanding on TDRs	$ 0
Number of new TDRs | loan	0	0
Number of loans experiencing payment default | loan	0	0
CARES Act [Member]
Financing Receivable, Modifications [Line Items]
PPP loan receivable amount for which SBA loan guarantee approval received	$ 47,700,000
PPP loans guarantee percent by the SBA	100.00%
Consumer [Member]
Financing Receivable, Modifications [Line Items]
Real estate foreclosed assets	$ 0		$ 0
Loans collateralized by residential real estate in process of foreclosure	$ 42,000		$ 0
Numbe of loans collateralized by residential real estate in process of foreclosure | loan	1

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Loans And Credit Quality (Composition Of Loans Receivable) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	100.00%	100.00%
Total Loans	$ 1,098,613	$ 1,089,618
Unearned origination fees	178	291
Allowance for Loan Losses	(11,034)	(10,570)
Net Loans	$ 1,087,757	$ 1,079,339
Commercial real estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	41.99%	41.51%
Total Loans	$ 461,331	$ 452,251
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	4.06%	4.42%
Total Loans	$ 44,650	$ 48,114
Residential real estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	52.97%	52.90%
Total Loans	$ 581,765	$ 576,437
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	0.05%	0.05%
Total Loans	$ 603	$ 640
Construction [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	0.93%	1.12%
Total Loans	$ 10,264	$ 12,176

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Loans And Credit Quality (Schedule Of Loan Portfolio By Aggregate Risk Rating) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	$ 1,098,613	$ 1,089,618
Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	1,095,385	1,086,782
Special Mention [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	506	512
Substandard [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	2,722	2,324
Commercial real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	461,331	452,251
Commercial real estate [Member] | Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	459,916	450,823
Commercial real estate [Member] | Substandard [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	1,415	1,428
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	44,650	48,114
Commercial [Member] | Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	44,650	48,114
Residential real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	581,765	576,437
Residential real estate [Member] | Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	580,267	575,344
Residential real estate [Member] | Special Mention [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	506	512
Residential real estate [Member] | Substandard [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	992	581
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	603	640
Consumer [Member] | Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	603	640
Construction [Member] | Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	10,264	12,176
Construction [Member] | Commercial [Member] | Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	9,949	11,861
Construction [Member] | Commercial [Member] | Substandard [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross	$ 315	$ 315

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Loans And Credit Quality (Schedule Of Impaired Loans) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	$ 2,500
Recorded Investment, With an allowance recorded	1,500
Total Recorded Investment	4,020		$ 3,640
Total Unpaid Principal Balance	4,330		3,950
Related Allowance	160		169
Total Average Recorded Investment Impaired	3,831	$ 3,495
Total Interest Income Recognized	39	36
Commercial real estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	840		851
Recorded Investment, With an allowance recorded	690		696
Total Recorded Investment	1,530		1,547
Unpaid Principal Balance, With no related allowance recorded	1,080		1,091
Unpaid Principal Balance, With an allowance recorded	690		696
Total Unpaid Principal Balance	1,770		1,787
Related Allowance	15		21
Average Recorded Investment, With no related allowance recorded	846	1,257
Average Recorded Investment, With an allowance recorded	693	350
Total Average Recorded Investment Impaired	1,539	1,607
Interest Income Recognized, With no related allowance recorded	15	13
Interest Income Recognized, With an allowance recorded	7	6
Total Interest Income Recognized	22	19
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With an allowance recorded	228		230
Total Recorded Investment	228		230
Unpaid Principal Balance, With an allowance recorded	228		230
Total Unpaid Principal Balance	228		230
Related Allowance	22		23
Average Recorded Investment, With an allowance recorded	229	234
Total Average Recorded Investment Impaired	229	234
Interest Income Recognized, With an allowance recorded	2	2
Total Interest Income Recognized	2	2
Residential real estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	1,351		944
Recorded Investment, With an allowance recorded	596		604
Total Recorded Investment	1,947		1,548
Unpaid Principal Balance, With no related allowance recorded	1,421		1,014
Unpaid Principal Balance, With an allowance recorded	596		604
Total Unpaid Principal Balance	2,017		1,618
Related Allowance	123		125
Average Recorded Investment, With no related allowance recorded	1,148	619
Average Recorded Investment, With an allowance recorded	600	720
Total Average Recorded Investment Impaired	1,748	1,339
Interest Income Recognized, With no related allowance recorded	7	7
Interest Income Recognized, With an allowance recorded	5	5
Total Interest Income Recognized	12	12
Construction [Member] | Commercial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	315		315
Total Recorded Investment	315		315
Unpaid Principal Balance, With no related allowance recorded	315		315
Total Unpaid Principal Balance	315		$ 315
Average Recorded Investment, With no related allowance recorded	315	315
Total Average Recorded Investment Impaired	315	315
Interest Income Recognized, With no related allowance recorded	3	3
Total Interest Income Recognized	$ 3	$ 3

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Loans And Credit Quality (Schedule Of Nonaccrual Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	$ 692	$ 274
Residential real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	$ 692	$ 274

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Loans And Credit Quality (Schedule Of Past Due Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 487	$ 894
Current	1,098,126	1,088,724
Total Loan Receivables	1,098,613	1,089,618
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	74	852
60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	154
Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	259	42
Commercial real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		514
Current	461,331	451,737
Total Loan Receivables	461,331	452,251
Commercial real estate [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		514
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	44,650	48,114
Total Loan Receivables	44,650	48,114
Residential real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	487	378
Current	581,278	576,059
Total Loan Receivables	581,765	576,437
Residential real estate [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	74	336
Residential real estate [Member] | 60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	154
Residential real estate [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	259	42
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		2
Current	603	638
Total Loan Receivables	603	640
Consumer [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		2
Construction [Member] | Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	10,264	12,176
Total Loan Receivables	$ 10,264	$ 12,176

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Loans And Credit Quality (Activity In Allowance For Loan Losses) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	$ 10,570,000	$ 8,022,000
Charge-offs	(2,000)	0
Recoveries	1,000	24,000
Provision for loan losses	465,000	320,000
Ending balance	11,034,000	8,366,000
Commercial real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	4,379,000	3,221,000
Recoveries		24,000
Provision for loan losses	308,000	108,000
Ending balance	4,687,000	3,353,000
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	848,000	770,000
Provision for loan losses	68,000	47,000
Ending balance	916,000	817,000
Commercial [Member] | Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	150,000	121,000
Provision for loan losses	(37,000)
Ending balance	113,000	121,000
Residential real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	4,485,000	3,488,000
Recoveries	1,000
Provision for loan losses	11,000	139,000
Ending balance	4,497,000	3,627,000
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	14,000	19,000
Charge-offs	(2,000)
Provision for loan losses		(1,000)
Ending balance	12,000	18,000
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	694,000	403,000
Provision for loan losses	115,000	27,000
Ending balance	$ 809,000	$ 430,000

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Loans And Credit Quality (Allocation Of Allowance For Loan Losses And Related Loan Portfolio) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	$ 11,034	$ 10,570	$ 8,366	$ 8,022
Allowance for Loan Losses, Ending balance: individually evaluated for impairment	160	169
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	10,874	10,401
Total Loan Receivables	1,098,613	1,089,618
Loans receivables, Ending balance: individually evaluated for impairment	4,020	3,640
Loans receivables, Ending balance: collectively evaluated for impairment	1,094,593	1,085,978
Commercial real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	4,687	4,379	3,353	3,221
Allowance for Loan Losses, Ending balance: individually evaluated for impairment	15	21
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	4,672	4,358
Total Loan Receivables	461,331	452,251
Loans receivables, Ending balance: individually evaluated for impairment	1,530	1,547
Loans receivables, Ending balance: collectively evaluated for impairment	459,801	450,704
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	916	848	817	770
Allowance for Loan Losses, Ending balance: individually evaluated for impairment	22	23
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	894	825
Total Loan Receivables	44,650	48,114
Loans receivables, Ending balance: individually evaluated for impairment	228	230
Loans receivables, Ending balance: collectively evaluated for impairment	44,422	47,884
Commercial [Member] | Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	113	150	121	121
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	113	150
Total Loan Receivables	10,264	12,176
Loans receivables, Ending balance: individually evaluated for impairment	315	315
Loans receivables, Ending balance: collectively evaluated for impairment	9,949	11,861
Residential real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	4,497	4,485	3,627	3,488
Allowance for Loan Losses, Ending balance: individually evaluated for impairment	123	125
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	4,374	4,360
Total Loan Receivables	581,765	576,437
Loans receivables, Ending balance: individually evaluated for impairment	1,947	1,548
Loans receivables, Ending balance: collectively evaluated for impairment	579,818	574,889
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	12	14	18	19
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	12	14
Total Loan Receivables	603	640
Loans receivables, Ending balance: collectively evaluated for impairment	603	640
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	809	694	$ 430	$ 403
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	$ 809	$ 694

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Loans And Credit Quality (Troubled Debt Restructuring Outstanding) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Modifications [Line Items]
Total Modifications	$ 2,545	$ 2,574
Accrual Loans [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	2,531	2,559
Non-Accrual Loans [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	14	15
Commercial real estate [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	1,113	1,125
Commercial real estate [Member] | Accrual Loans [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	1,113	1,125
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	228	230
Commercial [Member] | Accrual Loans [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	228	230
Commercial [Member] | Construction [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	260	260
Commercial [Member] | Construction [Member] | Accrual Loans [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	260	260
Residential real estate [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	944	959
Residential real estate [Member] | Accrual Loans [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	930	944
Residential real estate [Member] | Non-Accrual Loans [Member]
Financing Receivable, Modifications [Line Items]
Total Modifications	$ 14	$ 15

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Deposits (Components Of Deposits) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Deposits [Abstract]
Demand, non-interest bearing	$ 291,411	$ 269,996
Demand, NOW and money market, interest bearing	219,254	199,845
Savings	591,176	546,784
Time, $250 and over	78,267	85,272
Time, other	125,500	130,482
Total Deposits	$ 1,305,608	$ 1,232,379

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Deposits (Scheduled Maturities Of Time Deposits) (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Deposits [Abstract]
2021 (remainder of the year)	$ 111,820
2022	50,680
2023	33,776
2024	5,647
2025	1,258
2026	586
Total time deposits	$ 203,767

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Short-Term And Long-Term Borrowings (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 693,600,000
Short-term advances with FHLB outstanding	0	$ 0
Long-term advances FHLB	14,651,000	14,700,000
PPPLF borrowings		50,794,000
PPPLF Borrowings [Member]
Line of Credit Facility [Line Items]
PPPLF borrowings	$ 0	$ 50,800,000
Interest rate		0.35%
Maximum [Member]
Line of Credit Facility [Line Items]
Federal Home Loan Bank advance period	60 months
Federal Home Loan Bank Advances [Member]
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity	$ 150,000,000.0
Atlantic Community Bankers Bank (ACBB) [Member
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity	10,000,000.0	$ 10,000,000.0
Line of credit outstanding	$ 0	$ 0

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Short-Term And Long-Term Borrowings (Components Of Long-Term Borrowings With FHLB) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total Outstanding Borrowings	$ 14,651	$ 14,700
FHLB with 0.79% Interest Due in March 2022 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total Outstanding Borrowings	$ 10,000
Long-term FHLB borrowings, interest rate	0.79%
FHLB with 0.64% Interest Due in March 2022 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total Outstanding Borrowings	$ 2,663
Long-term FHLB borrowings, interest rate	0.64%
FHLB with 0.61% Interest Due in March 2022 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Total Outstanding Borrowings	$ 1,988
Long-term FHLB borrowings, interest rate	0.61%

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Stock Incentive Plan And Employee Stock Purchase Plan (Narrative) (Details) - USD ($)	3 Months Ended		51 Months Ended	126 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2021	Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock issued for ESPP	807	1,289
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	0	0
Unrecognized compensation cost	$ 0		$ 0	$ 0
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted	12,009	32,210		199,308
Restricted stock awards compensation expense	$ 246,000	$ 192,000
Minimum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Maximum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	9 years
2010 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	10 years
Award expiration date	Jun. 20, 2029
Shares available for issuance	440,805		440,805	440,805
2010 Stock Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized					756,356
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized	350,000		350,000	350,000
Shares of common stock issued for ESPP			16,068
Minimum work hours per week	20 hours
Minimum months to be eligible to participate	5 months
Purchase price for share percentage equal to fair value of such shares	95.00%
Maximum discount to fair value percentage	15.00%
Employee stock purchase plan, discount expense	$ 1,000

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Other Comprehensive Income (Components Of Other Comprehensive Income, Both Before Tax And Net Of Tax) (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
Other Comprehensive (Loss) Income [Abstract]
Unrealized holding (losses) gains on securities available for sale, Before Tax		$ (2,546)	$ 1,803
Unrealized holding (losses) gains on securities available for sale, Tax Effect		535	(378)
Unrealized holding (losses) gains on securities available for sale, Net of Tax		(2,011)	1,425
Reclassification adjustments for gains on securities transactions included in net income, Before Tax	[1],[2]	(24)
Reclassification adjustments for gains on securities transactions included in net income: Tax Effect	[1],[2]	5
Reclassification adjustments for gains on securities transactions included in net income: Net of Tax	[1],[2]	(19)
Total other comprehensive (loss) income, before tax		(2,570)	1,803
Total other comprehensive (loss) income, Tax Effect		540	(378)
Other comprehensive (loss) income, net of tax		$ (2,030)	$ 1,425

[1] Realized gains on securities transactions included in gain on sales of securities in the accompanying Consolidated Statements of Income.

[2] Tax effect included in income tax expense in the accompanying Consolidated Statements of Income.

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Other Comprehensive Income (Summary Of Realized Gains On Securities Available For Sale, Net Of Tax) (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
Other Comprehensive (Loss) Income [Abstract]
Realized gains on securities transactions	[1],[2]	$ (24)
Income taxes	[1],[2]	5
Reclassification adjustments for gains on securities transactions included in net income: Net of Tax	[1],[2]	$ (19)

[1] Realized gains on securities transactions included in gain on sales of securities in the accompanying Consolidated Statements of Income.

[2] Tax effect included in income tax expense in the accompanying Consolidated Statements of Income.

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Other Comprehensive Income (Summary Of Accumulated Other Comprehensive Income, Net Of Tax) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Other Comprehensive (Loss) Income [Abstract]
Beginning Balance	$ 2,937	$ 1,340
Other comprehensive income before reclassifications	(2,011)	1,425
Amounts reclassified from accumulated other comprehensive income	(19)
Other comprehensive (loss) income, net of tax	(2,030)	1,425
Ending Balance	$ 907	$ 2,765

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Basic And Diluted Earnings Per Share (Narrative) (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Basic And Diluted Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of diluted earnings per share	0	4,227

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Basic And Diluted Earnings Per Share (Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Basic And Diluted Earnings Per Share [Abstract]
Net income	$ 4,044	$ 2,457
Weighted average shares outstanding	7,532,246	7,443,875
Dilutive effect of potential common shares, stock options	33,235	37,630
Diluted weighted average common shares outstanding	7,565,481	7,481,505
Basic earnings per share	$ 0.54	$ 0.33
Diluted earnings per share	$ 0.53	$ 0.33

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Fair Value Measurements (Narrative) (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Fair Value Measurements [Abstract]
Impaired loans aggregate balance	$ 4,020,000	$ 3,640,000
Impaired loans without related allowance	2,500,000
Impaired loans with related allowance	1,500,000
Related Allowance	160,000	169,000
Real estate properties acquired through foreclosure	$ 0	$ 0

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Fair Value Measurements (Fair Value Of Financial Assets Measured On Recurring Basis) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	$ 164,084	$ 130,940
US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities		9,998
U.S Government Agency Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	33,327	39,036
Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	44,245	39,376
U.S. GSE - Mortgage-backed Securities [Member] | Commercial RealEstate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	527	543
U.S. GSE - Mortgage-backed Securities [Member] | Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	85,985	41,987
Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	164,084	130,940
Fair Value, Recurring [Member] | US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities		9,998
Fair Value, Recurring [Member] | U.S Government Agency Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	33,327	39,036
Fair Value, Recurring [Member] | Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	44,245	39,376
Fair Value, Recurring [Member] | U.S. GSE - Mortgage-backed Securities [Member] | Commercial RealEstate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	527	543
Fair Value, Recurring [Member] | U.S. GSE - Mortgage-backed Securities [Member] | Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	85,985	41,987
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Fair Value, Recurring [Member] | US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Fair Value, Recurring [Member] | U.S Government Agency Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Fair Value, Recurring [Member] | Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Fair Value, Recurring [Member] | U.S. GSE - Mortgage-backed Securities [Member] | Commercial RealEstate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member] | Fair Value, Recurring [Member] | U.S. GSE - Mortgage-backed Securities [Member] | Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 2) Significant Other Observable Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	164,084	13,940
(Level 2) Significant Other Observable Inputs [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	164,084	130,940
(Level 2) Significant Other Observable Inputs [Member] | Fair Value, Recurring [Member] | US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities		9,998
(Level 2) Significant Other Observable Inputs [Member] | Fair Value, Recurring [Member] | U.S Government Agency Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	33,327	39,036
(Level 2) Significant Other Observable Inputs [Member] | Fair Value, Recurring [Member] | Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	44,245	39,376
(Level 2) Significant Other Observable Inputs [Member] | Fair Value, Recurring [Member] | U.S. GSE - Mortgage-backed Securities [Member] | Commercial RealEstate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	527	543
(Level 2) Significant Other Observable Inputs [Member] | Fair Value, Recurring [Member] | U.S. GSE - Mortgage-backed Securities [Member] | Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	85,985	41,987
(Level 3) Significant Unobservable Inputs [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 3) Significant Unobservable Inputs [Member] | Fair Value, Recurring [Member] | US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 3) Significant Unobservable Inputs [Member] | Fair Value, Recurring [Member] | U.S Government Agency Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 3) Significant Unobservable Inputs [Member] | Fair Value, Recurring [Member] | Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 3) Significant Unobservable Inputs [Member] | Fair Value, Recurring [Member] | U.S. GSE - Mortgage-backed Securities [Member] | Commercial RealEstate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
(Level 3) Significant Unobservable Inputs [Member] | Fair Value, Recurring [Member] | U.S. GSE - Mortgage-backed Securities [Member] | Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities

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Fair Value Measurements (Fair Value Of Financial Assets Measured On Nonrecurring Basis) (Details) - Impaired Loans [Member] - Fair Value, Nonrecurring [Member] - FV determined through independent appraisals of the underlying collateral [Member] - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value	$ 1,354	$ 1,361
(Level 3) Significant Unobservable Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value	$ 1,354	$ 1,361

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Fair Value Measurements (Quantitative Information About Level 3 Fair Value Measurements) (Details) - Impaired Loans [Member] - Fair Value, Nonrecurring [Member] - (Level 3) Significant Unobservable Inputs [Member] - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
		Mar. 31, 2021	Dec. 31, 2020
Appraisal Adjustment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value		$ 1,354	$ 1,361
Appraisal Adjustment [Member] | Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)	[1]	(25.00%)	(25.00%)
Appraisal Adjustment [Member] | Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)	[1]	0.00%	0.00%
Appraisal Adjustment [Member] | Weighted Average [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)	[1]	(15.10%)	(15.10%)
Liquidation Expenses [Member] | Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)	[2]	(10.00%)	(10.00%)
Liquidation Expenses [Member] | Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)	[2]	0.00%	0.00%
Liquidation Expenses [Member] | Weighted Average [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)	[2]	(8.50%)	(8.50%)

[1] Appraisals may be adjusted by management for qualitative factors including economic conditions and the age of the appraisal. The range and weighted average of appraisal adjustments are presented as a percent of the appraisal.

[2] Appraisals and pending agreements of sale are adjusted by management for liquidation expenses. The range and weighted average of liquidation expense adjustments are presented as a percent of the appraisal or pending agreement of sale.

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Fair Value Measurements (Estimated Fair Value Of Financial Instruments) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	$ 164,084	$ 130,940
Paycheck Protection Program loans receivable	47,714	54,334
Paycheck Protection Program Liquidity Facility borrowings		50,794
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	120,114	131,907
Securities available for sale	164,084	130,940
Loans receivable, net of allowance	1,087,756	1,079,339
Paycheck Protection Program loans receivable	47,714	54,334
Restricted investments in bank stock	1,330	1,330
Accrued interest receivable	3,114	3,136
Deposits	1,305,608	1,232,379
Securities sold under agreements to repurchase and federal funds purchased	9,594	13,612
Long-term borrowings	14,651	14,651
Paycheck Protection Program Liquidity Facility borrowings		50,794
Accrued interest payable	1,069	1,640
Fair Value Estimate [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	120,114	131,907
Securities available for sale	164,084	130,940
Loans receivable, net of allowance	1,139,248	1,158,545
Paycheck Protection Program loans receivable	47,938	54,632
Restricted investments in bank stock	1,330	1,330
Accrued interest receivable	3,114	3,136
Deposits	1,308,187	1,235,483
Securities sold under agreements to repurchase and federal funds purchased	9,594	13,612
Long-term borrowings	14,694	14,707
Paycheck Protection Program Liquidity Facility borrowings		50,810
Accrued interest payable	1,069	1,640
(Level 1) Quoted Prices in Active Markets for Identical Assets [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	120,114	131,907
(Level 2) Significant Other Observable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	164,084	13,940
Restricted investments in bank stock	1,330	1,330
Accrued interest receivable	3,114	3,136
Deposits	1,308,187	1,235,483
Securities sold under agreements to repurchase and federal funds purchased	9,594	13,612
Accrued interest payable	1,069	1,640
(Level 3) Significant Unobservable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans receivable, net of allowance	1,139,248	1,158,545
Paycheck Protection Program loans receivable	47,938	54,632
Long-term borrowings	14,694	14,707
Paycheck Protection Program Liquidity Facility borrowings		50,810
Commitments to grant loans [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Commitments to grant loans [Member] | Fair Value Estimate [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Commitments to grant loans [Member] | (Level 1) Quoted Prices in Active Markets for Identical Assets [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Commitments to grant loans [Member] | (Level 2) Significant Other Observable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Commitments to grant loans [Member] | (Level 3) Significant Unobservable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Unfunded commitments underlines of credit [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Unfunded commitments underlines of credit [Member] | Fair Value Estimate [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Unfunded commitments underlines of credit [Member] | (Level 1) Quoted Prices in Active Markets for Identical Assets [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Unfunded commitments underlines of credit [Member] | (Level 2) Significant Other Observable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Unfunded commitments underlines of credit [Member] | (Level 3) Significant Unobservable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Standby Letters of Credit [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Standby Letters of Credit [Member] | Fair Value Estimate [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Standby Letters of Credit [Member] | (Level 1) Quoted Prices in Active Markets for Identical Assets [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Standby Letters of Credit [Member] | (Level 2) Significant Other Observable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments
Standby Letters of Credit [Member] | (Level 3) Significant Unobservable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Off-balance sheet financial instruments