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 JUNE 30, 2024 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 August 2, 2024	($1.00 Par Value)	7,617,680
	(Title Class)	(Outstanding Shares)

Embassy Bancorp, Inc.

Table of Contents

4
Part I – Financial Information	3
Item 1 – Financial Statements
Consolidated Balance Sheets (Unaudited)	3
Consolidated Statements of Income (Unaudited)	4
Consolidated Statements of Comprehensive (Loss) Income (Unaudited)	5
Consolidated Statements of Stockholders’ Equity (Unaudited)	6
Consolidated Statements of Cash Flows (Unaudited)	8
Notes to Consolidated Financial Statements (Unaudited)	9
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3 – Quantitative and Qualitative Disclosures About Market Risk	41
Item 4 – Controls and Procedures	42
Part II - Other Information	42
Item 1 - Legal Proceedings	42
Item 1A - Risk Factors	42
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3 - Defaults Upon Senior Securities	42
Item 4 – Mine Safety Disclosures	42
Item 5 - Other Information	42
Item 6 - Exhibits	43
Signatures	44

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2

Embassy Bancorp, Inc.

Part I – Financial Information

Item 1 – Financial Statements

Consolidated Balance Sheets (Current Period Unaudited)

	June 30,		December 31,
ASSETS	2024		2023
	(In Thousands, Except Share Data)
Cash and due from banks	$	17,633	$	16,133
Interest bearing demand deposits with banks		117,253		61,790
Federal funds sold		1,000		1,000
Cash and Cash Equivalents		135,886		78,923
Securities available for sale		258,812		276,060
Restricted investment in bank stock		1,038		2,458
Loans receivable, net of allowance for credit losses of $12,246 in 2024; $12,461 in 2023		1,250,478		1,241,578
Premises and equipment, net of accumulated depreciation		3,526		3,734
Bank owned life insurance		35,866		26,310
Accrued interest receivable		3,413		3,298
Other assets		27,681		24,135
Total Assets	$	1,716,700	$	1,656,496
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	351,810	$	328,669
Interest bearing		1,215,790		1,147,564
Total Deposits		1,567,600		1,476,233
Securities sold under agreements to repurchase		19,577		15,237
Short-term borrowings		-		35,000
Accrued interest payable		7,783		7,844
Other liabilities		19,120		16,527
Total Liabilities		1,614,080		1,550,841
Stockholders' Equity:
Common stock, $1 par value; authorized 20,000,000 shares;
2024 issued 7,779,691 shares; outstanding 7,617,680 shares;
2023 issued 7,758,247 shares; outstanding 7,596,236 shares;		7,780		7,758
Surplus		28,659		28,246
Retained earnings		117,847		116,018
Accumulated other comprehensive loss		(48,999)		(43,700)
Treasury stock, at cost: 162,011 shares at June 30, 2024 and
December 31, 2023, respectively		(2,667)		(2,667)
Total Stockholders' Equity		102,620		105,655
Total Liabilities and Stockholders' Equity	$	1,716,700	$	1,656,496

See notes to consolidated financial statements (unaudited).

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3

Embassy Bancorp, Inc.

Consolidated Statements of Income (Unaudited) 

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024			2023
	(In Thousands, Except Per Share Data)
INTEREST INCOME
Loans, including fees	$	13,388	$	11,964	$	26,474	$	23,367
Securities, taxable		1,402		1,559		2,818		3,102
Securities, non-taxable		296		305		594		610
Short-term investments, including federal funds sold		1,033		329		1,330		799
Total Interest Income		16,119		14,157		31,216		27,878
INTEREST EXPENSE
Deposits		7,072		4,054		13,340		6,868
Securities sold under agreements to repurchase and federal
funds purchased		159		86		264		143
Short-term borrowings		-		7		5		7
Total Interest Expense		7,231		4,147		13,609		7,018
Net Interest Income		8,888		10,010		17,607		20,860
(CREDIT) PROVISION FOR CREDIT LOSSES		(283)		110		(355)		110
Net Interest Income after (Credit) ‎   Provision for Credit Losses		9,171		9,900		17,962		20,750
OTHER NON-INTEREST INCOME
Merchant and credit card processing fees		79		94		163		182
Debit card interchange fees		236		232		443		449
Other service fees		154		157		305		310
Bank owned life insurance		235		192		526		392
Total Other Non-Interest Income		704		675		1,437		1,333
OTHER NON-INTEREST EXPENSES
Salaries and employee benefits		3,477		3,592		6,927		7,318
Occupancy and equipment		1,036		949		2,052		1,936
Data processing		830		759		1,445		1,530
Advertising and promotion		203		280		390		567
Professional fees		259		261		531		499
FDIC insurance		190		200		378		377
Loan & real estate		67		45		116		97
Charitable contributions		310		290		517		513
Other		505		486		1,022		893
Total Other Non-Interest Expenses		6,877		6,862		13,378		13,730
Income Before Income Taxes		2,998		3,713		6,021		8,353
INCOME TAX EXPENSE		506		666		993		1,519
Net Income	$	2,492	$	3,047	$	5,028	$	6,834
BASIC EARNINGS PER SHARE	$	0.33	$	0.40	$	0.66	$	0.90
DILUTED EARNINGS PER SHARE	$	0.33	$	0.40	$	0.66	$	0.90
DIVIDENDS PER SHARE	$	0.42	$	0.40	$	0.42	$	0.40

See notes to consolidated financial statements (unaudited).
‎

4

Embassy Bancorp, Inc.

Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

	Three Months Ended June 30,
	2024			2023
		(In Thousands)
Net Income	$		2,492	$		3,047
Change in Accumulated Other Comprehensive Loss:
Unrealized holding loss on securities available for sale		(685)			(881)
Less: reclassification adjustment for realized gains		-			-
		(685)			(881)
Income tax effect		144			185
Net unrealized loss		(541)			(696)
Other comprehensive loss, net of tax			(541)			(696)
Comprehensive Income	$		1,951	$		2,351

	Six Months Ended June 30,
	2024			2023
		(In Thousands)
Net Income	$		5,028	$		6,834
Change in Accumulated Other Comprehensive Loss:
Unrealized holding (loss) gain on securities available for sale		(6,708)			3,367
Less: reclassification adjustment for realized gains		-			-
		(6,708)			3,367
Income tax effect		1,409			(707)
Net unrealized (loss) gain		(5,299)			2,660
Other comprehensive (loss) income, net of tax			(5,299)			2,660
Comprehensive (Loss) Income	$		(271)	$		9,494

See notes to consolidated financial statements (unaudited).

5

Embassy Bancorp, Inc.

Consolidated Statements of Stockholders’ Equity (Unaudited)

	Six Months Ended June 30, 2024
	Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total
	(In Thousands, Except Share Data)
BALANCE - DECEMBER 31, 2023	$	7,758	$	28,246	$	116,018	$	(43,700)	$	(2,667)	$	105,655
Net income		-		-		2,536		-		-		2,536
Other comprehensive loss, net of tax		-		-		-		(4,758)		-		(4,758)
Common stock grants to directors, ‎ 18,843 shares		19		248		-		-		-		267
Compensation expense recognized on stock ‎grants, net of unearned compensation expense ‎ of $265		-		67		-		-		-		67
Shares issued under employee stock purchase ‎plan, 1,393 shares		1		17		-		-		-		18
BALANCE - MARCH 31, 2024	$	7,778	$	28,578	$	118,554	$	(48,458)	$	(2,667)	$	103,785
Net income		-		-		2,492		-		-		2,492
Other comprehensive loss, net of tax		-		-		-		(541)		-		(541)
Dividend declared, $0.42 per share		-		-		(3,199)		-		-		(3,199)
Compensation expense recognized on ‎stock grants, net of unearned compensation ‎ expense of $198		-		66		-		-		-		66
Shares issued under employee stock purchase ‎plan, 1,209 shares		2		15		-		-		-		17
BALANCE - JUNE 30, 2024	$	7,780	$	28,659	$	117,847	$	(48,999)	$	(2,667)	$	102,620

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6

Embassy Bancorp, Inc.

Consolidated Statements of Stockholders’ Equity (Unaudited)

	Six Months Ended June 30, 2023
	Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total
	(In Thousands, Except Share Data)
BALANCE - DECEMBER 31, 2022	$	7,740	$	27,627	$	106,551	$	(51,107)	$	(2,535)	$	88,276
Net income		-		-		3,787		-		-		3,787
Other comprehensive income, net of tax		-		-		-		3,356		-		3,356
Common stock grants to directors, ‎ 13,877 shares		14		243		-		-		-		257
Compensation expense recognized on stock ‎grants, net of unearned compensation expense ‎of $560		-		82		-		-		-		82
Shares issued under employee stock purchase ‎plan, 939 shares		1		15		-		-		-		16
Cumulative effect from change in accounting ‎ principle - CECL		-		-		(148)		-		-		(148)
BALANCE - MARCH 31, 2023	$	7,755	$	27,967	$	110,190	$	(47,751)	$	(2,535)	$	95,626
Net income		-		-		3,047		-		-		3,047
Other comprehensive loss, net of tax		-		-		-		(696)		-		(696)
Dividend declared, $0.40 per share		-		-		(3,041)		-		-		(3,041)
Compensation expense recognized on ‎stock grants, net of unearned compensation ‎expense of $484		-		76		-		-		-		76
Shares issued under employee stock purchase ‎plan, 1,357 shares		1		18		-		-		-		19
BALANCE - JUNE 30, 2023	$	7,756	$	28,061	$	110,196	$	(48,447)	$	(2,535)	$	95,031

See notes to consolidated financial statements (unaudited).

7

Embassy Bancorp, Inc.

Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended June 30,
	2024		2023
	(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	5,028	$	6,834
Adjustments to reconcile net income to net cash provided by operating activities:
(Credit) provision for credit losses		(355)		110
Amortization of deferred loan costs		148		112
Depreciation		538		429
Net accretion of investment security premiums and discounts		(205)		(271)
Stock compensation expense		400		415
Income on bank owned life insurance		(526)		(392)
(Increase) decrease in accrued interest receivable		(115)		68
Increase in other assets		(2,137)		(92)
(Decrease) increase in accrued interest payable		(61)		3,823
(Decrease) increase in other liabilities		(606)		43
Net Cash Provided by Operating Activities		2,109		11,079
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available for sale		-		(4,874)
Maturities, calls and principal repayments of securities available for sale		10,745		10,265
Net increase in loans		(8,693)		(34,660)
Net redemption (purchase) of restricted investment in bank stock		1,420		(1,938)
Purchase of bank owned life insurance		(9,030)		-
Purchases of premises and equipment		(330)		(422)
Proceeds on bank owned life insurance		-		29
Net Cash Used in Investing Activities		(5,888)		(31,600)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits		91,367		(16,077)
Net increase (decrease) in securities sold under agreements to repurchase		4,340		(2,867)
(Decrease) increase in short-term borrowings		(35,000)		46,875
Proceeds from Employee Stock Purchase Plan		35		35
Net Cash Provided by Financing Activities		60,742		27,966
Net Increase in Cash and Cash Equivalents		56,963		7,445
CASH AND CASH EQUIVALENTS - BEGINNING		78,923		67,295
CASH AND CASH EQUIVALENTS - ENDING	$	135,886	$	74,740
SUPPLEMENTARY CASH FLOWS INFORMATION
Interest paid	$	13,670	$	3,195
Income taxes paid	$	1,036	$	2,290
Non-cash Investing and Financing Activities:
Dividend declared	$	3,199	$	3,041

See notes to consolidated financial statements (unaudited).

8

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 and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

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, 2023, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 28, 2024.

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 2023 consolidated financial statements may have been reclassified to conform to 2024 presentation. These reclassifications had no effect on 2023 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, 2023.

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9

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Note 3 – Securities Available For Sale

At June 30, 2024 and December 31, 2023, respectively, the amortized cost and fair values of securities available-for-sale were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
June 30, 2024:
U.S. Treasury securities	$	12,439	$	-	$	(201)	$	12,238
U.S. Government agency obligations		2,474		-		(105)		2,369
Municipal bonds		72,713		19		(14,018)		58,714
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		509		-		(73)		436
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		232,701		-		(47,646)		185,055
Total	$	320,836	$	19	$	(62,043)	$	258,812
December 31, 2023:
U.S. Treasury securities	$	14,867	$	-	$	(277)	$	14,590
U.S. Government agency obligations		2,463		-		(124)		2,339
Municipal bonds		73,128		73		(12,405)		60,796
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		509		-		(67)		442
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		240,409		2		(42,518)		197,893
Total	$	331,376	$	75	$	(55,391)	$	276,060

The amortized cost and fair value of securities as of June 30, 2024, 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	$	9,938	$	9,804
Due after one year through five years		7,323		7,010
Due after five years through ten years		6,875		6,467
Due after ten years		63,490		50,040
		87,626		73,321
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - commercial		509		436
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - residential		232,701		185,055
Total	$	320,836	$	258,812

There were no sales of securities for the three and six months ended June 30, 2024 and 2023.

Securities with a carrying value of $159.9 million and $145.7 million at June 30, 2024 and December 31, 2023, respectively, were subject to agreements to repurchase, pledged to secure public deposits, or pledged for other purposes required or permitted by law.

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10

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

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 June 30, 2024 and December 31, 2023:

		Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2024:	(In Thousands)
U.S. Treasury securities	$	-	$	-	$	12,238	$	(201)	$	12,238	$	(201)
U.S. Government agency obligations		-		-		2,369		(105)		2,369		(105)
Municipal bonds		12,000		(1,014)		45,615		(13,004)		57,615		(14,018)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
commercial		-		-		436		(73)		436		(73)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
residential		23		-		184,980		(47,646)		185,003		(47,646)
Total Temporarily Impaired Securities	$	12,023	$	(1,014)	$	245,638	$	(61,029)	$	257,661	$	(62,043)
		.
December 31, 2023:
U.S. Treasury securities	$	-	$	-	$	14,590	$	(277)	$	14,590	$	(277)
U.S. Government agency obligations		-		-		2,339		(124)		2,339		(124)
Municipal bonds		5,561		(201)		52,267		(12,204)		57,828		(12,405)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
commercial		-		-		442		(67)		442		(67)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
residential		-		-		197,796		(42,518)		197,796		(42,518)
Total Temporarily Impaired Securities	$	5,561	$	(201)	$	267,434	$	(55,190)	$	272,995	$	(55,391)

The Company had one hundred ninety-six (196) securities in an unrealized loss position at June 30, 2024 and one hundred eighty-nine (189) securities in an unrealized loss position at December 31, 2023. The Company reviews its investment portfolio on a quarterly basis for indications of impairment due to credit-related factors or noncredit-related factors and the Company does not intend to sell the securities and has the intent and ability to hold them for a period of time sufficient for recovery of their amortized cost basis. This review includes analyzing the extent to which the fair value has been lower than the cost, the market liquidity for the investment, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer, and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. Management believes that the unrealized loss only represents temporary impairment of the securities, which are predominantly backed by credit of government agencies, and are a result of the increased market interest rates due to the current economic conditions, and not the credit quality of the issuer. As such, no allowance for credit losses was required on securities available for sale in an unrealized loss position at June 30, 2024 and December 31, 2023.

Note 4 – 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 $998 thousand and $2.4 million as of June 30, 2024 and December 31, 2023, respectively. The Bank had ACBB stock at a carrying value of $40 thousand at June 30, 2024 and December 31, 2023.

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11

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

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 June 30, 2024.

Note 5 – Loans and Credit Quality

The following table presents the composition of loans receivable at June 30, 2024 and December 31, 2023, respectively:

	June 30, 2024			December 31, 2023
			Percentage of			Percentage of
	Balance		total Loans	Balance		total Loans
		(Dollars in Thousands)
Commercial real estate	$	535,850	42.46%	$	539,034	43.00%
Commercial construction		19,230	1.52%		16,840	1.34%
Commercial		38,788	3.07%		33,951	2.71%
Residential real estate		667,769	52.91%		663,127	52.90%
Consumer		495	0.04%		565	0.05%
Total loans		1,262,132	100.00%		1,253,517	100.00%
Unearned origination fees		592			522
Allowance for credit losses		(12,246)			(12,461)
Net Loans	$	1,250,478		$	1,241,578

‎

12

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention (potential weakness), substandard (well defined weakness) and doubtful (full collection unlikely) within the Company's internal risk rating system as of June 30, 2024 by year of origination:

		2024		2023		2022		2021		2020		Prior		Revolving		Total
June 30, 2024		(In Thousands)
Commercial
real estate
	Pass	$	26,187	$	61,255	$	149,545	$	51,128	$	61,118	$	176,099	$	9,291	$	534,623
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		1,227		-		1,227
	Total		26,187		61,255		149,545		51,128		61,118		177,326		9,291		535,850
Commercial
construction
	Pass		1,934		3,215		8,591		5,167		-		29		-		18,936
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		239		55		294
	Total		1,934		3,215		8,591		5,167		-		268		55		19,230
Commercial
	Pass		4,992		2,073		4,272		1,872		3,006		13,941		8,611		38,767
	Special Mention		-		-		-		-		-		21		-		21
	Substandard		-		-		-		-		-		-		-		-
	Total		4,992		2,073		4,272		1,872		3,006		13,962		8,611		38,788
Residential
real estate
	Pass		38,140		69,892		91,967		152,093		135,106		156,511		22,553		666,262
	Special Mention		-		-		-		-		-		432		-		432
	Substandard		-		-		44		-		-		1,031		-		1,075
	Total		38,140		69,892		92,011		152,093		135,106		157,974		22,553		667,769
Consumer
	Pass		75		81		93		16		-		9		221		495
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		-		-		-
	Total		75		81		93		16		-		9		221		495
Total
Loans Receivable		$	71,328	$	136,516	$	254,512	$	210,276	$	199,230	$	349,539	$	40,731	$	1,262,132

The Company had gross charge-offs of $11 thousand during the six months ending June 30, 2024. One (1) charge-off of $5 thousand was a consumer loan originated in 2021 and one (1) charge-off of $6 thousand was a consumer loan originated in 2023.

‎

13

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention (potential weakness), substandard (well defined weakness) and doubtful (full collection unlikely) within the Company's internal risk rating system as of December 31, 2023 by year of origination:

		2023		2022		2021		2020		2019		Prior		Revolving		Total
December 31, 2023		(In Thousands)
Commercial
real estate
	Pass	$	62,467	$	160,257	$	58,094	$	64,146	$	26,835	$	157,888	$	8,094	$	537,781
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		1,253		-		1,253
	Total		62,467		160,257		58,094		64,146		26,835		159,141		8,094		539,034
Commercial
construction
	Pass		2,071		8,591		5,412		-		440		30		-		16,544
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		241		55		296
	Total		2,071		8,591		5,412		-		440		271		55		16,840
Commercial
	Pass		2,236		4,851		2,260		3,312		5,388		9,311		6,572		33,930
	Special Mention		-		-		-		-		21		-		-		21
	Substandard		-		-		-		-		-		-		-		-
	Total		2,236		4,851		2,260		3,312		5,409		9,311		6,572		33,951
Residential
real estate
	Pass		75,372		96,032		158,135		142,318		46,035		122,252		21,423		661,567
	Special Mention		-		-		-		-		-		443		-		443
	Substandard		-		-		-		-		173		944		-		1,117
	Total		75,372		96,032		158,135		142,318		46,208		123,639		21,423		663,127
Consumer
	Pass		130		118		22		1		13		11		270		565
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		-		-		-
	Total		130		118		22		1		13		11		270		565
Total
Loans Receivable		$	142,276	$	269,849	$	223,923	$	209,777	$	78,905	$	292,373	$	36,414	$	1,253,517

The Company had no loans that were charged off during the year ended December 31, 2023 and therefore no gross charge-off information is presented in the above table.

At June 30, 2024, the Company had no foreclosed assets and had three (3) recorded investment in mortgage loans collateralized by residential real estate property in the process of foreclosure in the amount of $739 thousand. At December 31, 2023, the Company had no foreclosed assets and had one (1) recorded investment in a mortgage loan collateralized by residential real estate property in the process of foreclosure in the amount of $121 thousand.

‎

14

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following table presents the carrying value and related allowance for credit losses of individually analyzed loans at June 30, 2024 and December 31, 2023, respectively:

	June 30, 2024						December 31, 2023
	Recorded Investment		Unpaid Principal Balance		Related Allowance for Credit Losses		Recorded Investment		Unpaid Principal Balance		Related Allowance for Credit Losses
	(In Thousands)
With no related allowance recorded:
Commercial real estate (1)	$	1,227	$	1,227			$	1,303	$	1,543
Commercial construction (1)		55		55				55		55
Commercial		-		-				-		-
Residential real estate (1)		1,224		1,227				1,202		1,206
Consumer		-		-				-		-
With an allowance recorded:
Commercial real estate	$	-	$	-	$	-	$	-	$	-	$	-
Commercial construction (1)		239		239		20		241		241		22
Commercial (2)		21		21		21		21		21		21
Residential real estate (1)		431		431		83		516		516		152
Consumer		-		-		-		-		-		-
Total:
Commercial real estate	$	1,227	$	1,227	$	-	$	1,303	$	1,543	$	-
Commercial construction		294		294		20		296		296		22
Commercial		21		21		21		21		21		21
Residential real estate		1,655		1,658		83		1,718		1,722		152
Consumer		-		-		-		-		-		-
	$	3,197	$	3,200	$	124	$	3,338	$	3,582	$	195

1.All loans are real estate collateral dependent.

2.All loans are non-collateral dependent loans.

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

	June 30, 2024		December 31, 2023
	(In Thousands)
Commercial real estate	$	-	$	-
Commercial construction		-		-
Commercial		-		-
Residential real estate		292		366
Consumer		-		-
Total	$	292	$	366

As of June 30, 2024, there were three (3) loans in non-accrual status in the amount of $292 thousand. There was no required related allowance for these collateral dependent non-accrual loans. There was no interest income recognized for the three months ended June 30, 2024 and interest income of $1 thousand was recognized for the six months ended June 30, 2024. As of December 31, 2023, there were three (3) loans in non-accrual status in the amount of $366 thousand. There was a required related allowance of $66 thousand for these collateral dependent non-accrual loans.
‎

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 June 30, 2024 and December 31, 2023, 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
June 30, 2024	(In Thousands)
Commercial real estate	$	742	$	-	$	-	$	742	$	535,108	$	535,850	$	-
Commercial construction		-		-		-		-		19,230		19,230		-
Commercial		-		-		-		-		38,788		38,788		-
Residential real estate		607		-		788		1,395		666,374		667,769		496
Consumer		1		-		-		1		494		495		-
Total	$	1,350	$	-	$	788	$	2,138	$	1,259,994	$	1,262,132	$	496
December 31, 2023
Commercial real estate	$	630	$	-	$	-	$	630	$	538,404	$	539,034	$	-
Commercial construction		-		-		-		-		16,840		16,840		-
Commercial		-		-		-		-		33,951		33,951		-
Residential real estate		344		-		193		537		662,590		663,127		-
Consumer		-		-		-		-		565		565		-
Total	$	974	$	-	$	193	$	1,167	$	1,252,350	$	1,253,517	$	-

‎

16

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables detail the activity in the allowance for credit losses for the three and six months ended June 30, 2024 and June 30, 2023, respectively:

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for credit losses	(In Thousands)
Three Months Ending June 30, 2024
Beginning Balance - March 31, 2024	$	6,216	$	237	$	553	$	5,508	$	29	$	-	$	12,543
Charge-offs		-		-		-		-		(11)		-		(11)
Recoveries		-		-		-		-		-		-		-
Provisions (credits) on loans		(199)		(10)		(28)		(70)		21		-		(286)
Ending Balance - June 30, 2024	$	6,017	$	227	$	525	$	5,438	$	39	$	-	$	12,246
Six Months Ending June 30, 2024
Beginning Balance - December 31, 2023	$	6,108	$	195	$	920	$	5,224	$	14	$	-	$	12,461
Charge-offs		-		-		-		-		(11)		-		(11)
Recoveries		240		-		-		-		-		-		240
Provisions (credits) on loans		(331)		32		(395)		214		36		-		(444)
Ending Balance - June 30, 2024	$	6,017	$	227	$	525	$	5,438	$	39	$	-	$	12,246
Allowance for credit losses
Three Months Ending June 30, 2023
Beginning Balance - March 31, 2023	$	5,605	$	277	$	1,117	$	5,482	$	32	$	124	$	12,637
Charge-offs		-		-		-		-		-		-		-
Recoveries		-		-		-		1		-		-		1
Provisions (credits) on loans		336		40		(144)		(184)		(9)		71		110
Ending Balance - June 30, 2023	$	5,941	$	317	$	973	$	5,299	$	23	$	195	$	12,748
Six Months Ending June 30, 2023
Beginning Balance - December 31, 2022	$	5,113	$	200	$	1,289	$	4,960	$	13	$	874	$	12,449
January 1, 2023 adoption of ASU 2016-13		492		77		(172)		522		19		(750)		188
Charge-offs		-		-		-		-		-		-		-
Recoveries		-		-		-		1		-		-		1
Provisions (credits) on loans		336		40		(144)		(184)		(9)		71		110
Ending Balance - June 30, 2023	$	5,941	$	317	$	973	$	5,299	$	23	$	195	$	12,748

‎

17

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The following tables represent the allocation for credit losses and the related loan portfolio disaggregated based on impairment methodology at June 30, 2024 and December 31, 2023:

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
	(In Thousands)
June 30, 2024
Allowance for Credit Losses
Ending Balance	$	6,017	$	227	$	525	$	5,438	$	39	$	-	$	12,246
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	-	$	20	$	-	$	83	$	-	$	-	$	103
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-	$	-	$	21
Ending balance: collectively evaluated for impairment	$	6,017	$	207	$	504	$	5,355	$	39	$	-	$	12,122
Loans receivables:
Ending balance	$	535,850	$	19,230	$	38,788	$	667,769	$	495			$	1,262,132
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	1,227	$	294	$	-	$	1,655	$	-			$	3,176
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-			$	21
Ending balance: collectively evaluated for impairment	$	534,623	$	18,936	$	38,767	$	666,114	$	495			$	1,258,935
December 31, 2023
Allowance for Credit Losses
Ending Balance	$	6,108	$	195	$	920	$	5,224	$	14	$	-	$	12,461
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	-	$	22	$	-	$	152	$	-	$	-	$	174
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-	$	-	$	21
Ending balance: collectively evaluated for impairment	$	6,108	$	173	$	899	$	5,072	$	14	$	-	$	12,266
Loans receivables:
Ending balance	$	539,034	$	16,840	$	33,951	$	663,127	$	565			$	1,253,517
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	1,303	$	296	$	-	$	1,718	$	-			$	3,317
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-			$	21
Ending balance: collectively evaluated for impairment	$	537,731	$	16,544	$	33,930	$	661,409	$	565			$	1,250,179

‎

18

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Based on the guidance in ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, a loan modification or refinancing results in a new loan if the terms of the new loan are at least as favorable to the lender as the terms with customers with similar collection risks that are not refinancing or restricting their loans and the modification to the terms of the loan are more than minor. If a loan modification or refinancing does not result in a new loan, it is classified as a loan modification.

There are additional disclosures for modification of loans with borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows. The disclosures are applicable to situations where there is principal forgiveness, interest rate reductions, other than insignificant payment delays, term extensions, or a combination of any of these items. If the Company modifies any loans to borrowers in financial distress that involves principal forgiveness, the amount of principal that is forgiven is charged off against the allowance for credit losses. The Company had no new loan modifications to borrowers experiencing financial difficulties in the six months ending June 30, 2023, and there were no modifications to borrowers experiencing financial difficulties that were outstanding at June 30, 2023.

The following table presents new loan modifications for credit concerns during the six months ending June 30, 2024:

	Number of Loans	Pre-Modification Outstanding Balance		Post- Modification Outstanding Balance
	(Dollars In Thousands)
Six Months Ending June 30, 2024
Residential real estate	1	$	79	$	79
	1	$	79	$	79

The loan modification listed above had no reserve recorded in the allowance for credit losses at June 30, 2024. The above loan was not past due at June 30, 2024. The borrower was experiencing financial distress. The modified home equity loan had an extended maturity date compared to the original loan. The above loan represents less than 0.01% of the total residential real estate loans outstanding at June 30, 2024. There is no commitment to lend additional amounts on this modified loan. The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. There were $139 thousand of modifications to borrowers experiencing financial difficulties that were outstanding at June 30, 2024.

Note 6 – Deposits

The components of deposits at June 30, 2024 and December 31, 2023 are as follows:

	June 30, 2024		December 31, 2023
	(In Thousands)
Demand, non-interest bearing	$	351,810	$	328,669
Demand, NOW and money market, interest bearing		304,417		252,400
Savings		461,383		493,129
Time, $250 and over		155,724		138,765
Time, other		294,266		263,270
Total deposits	$	1,567,600	$	1,476,233

‎

19

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

At June 30, 2024, the scheduled maturities of time deposits are as follows (in thousands):

2024 (remainder of the year)	$	283,844
2025		138,819
2026		24,475
2027		1,432
2028		1,341
2029		79
	$	449,990

Note 7 – 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 June 30, 2024, the Bank had a maximum borrowing capacity for short-term and long-term FHLB advances of approximately $804.9 million, of which $804.8 million is available for borrowing at June 30, 2024 due to an outstanding letter of credit in the amount of $160 thousand. This borrowing capacity with the FHLB includes a line of credit of $150.0 million. There were no short-term or long-term FHLB advances outstanding as of June 30, 2024. There were $35.0 million short-term FHLB advances outstanding and no long-term FHLB advances outstanding as of December 31, 2023. 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 June 30, 2024 and December 31, 2023. Advances from this line are unsecured.

The Bank is also eligible to borrow under the Federal Reserve Bank’s discount window borrowing programs.

The Company has a revolving line of credit facility with the ACBB of $7.5 million, of which none was outstanding at June 30, 2024 and December 31, 2023. Advances from this line are unsecured. Under the terms of this renewed facility, availability under the revolving line of credit would be reduced to $5.0 million should the Company’s net tangible equity ratio drop below 5% and availability would be reduced to $2.0 million should the Company’s net tangible equity ratio drop below 2%. If the Company’s net tangible equity ratio drops below 0%, the commitment is canceled.

Note 8 – 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 June 30, 2024, there were 375,155 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 two 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

20

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

plan and through the period ended June 30, 2024, there have been 264,958 awards granted. There were no awards granted during the three months ended June 30, 2024 and 2023. During the six months ended June 30, 2024 and 2023 there were 18,843 and 13,877 awards granted, respectively. During the three and six months ended June 30, 2024, the Company recognized compensation expense for restricted stock awards of $66 thousand and $400 thousand, respectively. During the three and six months ended June 30, 2023, the Company recognized compensation expense for restricted stock awards of $76 thousand and $415 thousand, 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 and six months ended June 30, 2024 and 2023. At June 30, 2024 there were no outstanding options.

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 is 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 29,094 shares have been issued as of June 30, 2024. The Company recognized discount expense in relation to the ESPP of $1 thousand and $2 thousand for the three and six months ended June 30, 2024 and June 30, 2023, respectively.

‎

21

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Note 9 – 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 (loss) income. Management believes that the unrealized losses on securities available for sale are primarily a result of the increasing market interest rates and the overall current market conditions.

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

	Three Months Ended June 30,
	2024						2023
	(In Thousands)
	Before		Tax		Net of		Before		Tax		Net of
	Tax		Effect		Tax		Tax		Effect		Tax
Change in accumulated other comprehensive loss:
Unrealized holding losses on securities ‎   available for sale	$	(685)	$	144	$	(541)	$	(881)	$	185	$	(696)
Reclassification adjustments for gains on securities ‎   transactions included in net income (A),(B)		-		-		-		-		-		-
Total other comprehensive loss	$	(685)	$	144	$	(541)	$	(881)	$	185	$	(696)

	Six Months Ended June 30,
	2024						2023
	(In Thousands)
	Before		Tax		Net of		Before		Tax		Net of
	Tax		Effect		Tax		Tax		Effect		Tax
Change in accumulated other comprehensive loss:
Unrealized holding (losses) gains on securities ‎   available for sale	$	(6,708)	$	1,409	$	(5,299)	$	3,367	$	(707)	$	2,660
Reclassification adjustments for gains on securities ‎   transactions included in net income (A),(B)		-		-		-		-		-		-
Total other comprehensive (loss) income	$	(6,708)	$	1,409	$	(5,299)	$	3,367	$	(707)	$	2,660

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

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

There were no realized gains on securities available for sale for the three and six months ended June 30, 2024 and 2023.

‎

22

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

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

	Securities
	Available
	for Sale
Three Months Ended June 30, 2024 and 2023	(In Thousands)
Balance March 31, 2024	$	(48,458)
Other comprehensive loss before reclassifications		(541)
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive loss during the period		(541)
Balance June 30, 2024	$	(48,999)
Balance March 31, 2023	$	(47,751)
Other comprehensive loss before reclassifications		(696)
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive loss during the period		(696)
Balance June 30, 2023	$	(48,447)
Six Months Ended June 30, 2024 and 2023
Balance January 1, 2024	$	(43,700)
Other comprehensive loss before reclassifications		(5,299)
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive loss during the period		(5,299)
Balance June 30, 2024	$	(48,999)
Balance January 1, 2023	$	(51,107)
Other comprehensive income before reclassifications		2,660
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive income during the period		2,660
Balance June 30, 2023	$	(48,447)

‎

23

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Note 10 – 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				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(Dollars In Thousands, Except Share and Per Share Data)
Net income	$	2,492	$	3,047	$	5,028	$	6,834
Weighted average shares outstanding		7,616,511		7,601,822		7,609,591		7,596,829
Dilutive effect of potential common shares, stock options		-		-		-		-
Diluted weighted average common shares outstanding		7,616,511		7,601,822		7,609,591		7,596,829
Basic earnings per share	$	0.33	$	0.40	$	0.66	$	0.90
Diluted earnings per share	$	0.33	$	0.40	$	0.66	$	0.90

There were no stock options not considered in computing diluted earnings per common share for the three and six months ended June 30, 2024 and June 30, 2023.

Note 11 – 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).
‎

24

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

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 June 30, 2024 and December 31, 2023, 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. Treasury securities	$	-	$	12,238	$	-	$	12,238
U.S. Government agency obligations		-		2,369		-		2,369
Municipal bonds		-		58,714		-		58,714
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		436		-		436
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		185,055		-		185,055
June 30, 2024 Securities available for sale	$	-	$	258,812	$	-	$	258,812
U.S. Treasury securities	$	-	$	14,590	$	-	$	14,590
U.S. Government agency obligations		-		2,339		-		2,339
Municipal bonds		-		60,796		-		60,796
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		442		-		442
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		197,893		-		197,893
December 31, 2023 Securities available for sale	$	-	$	276,060	$	-	$	276,060

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 June 30, 2024 and December 31, 2023, 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)
June 30, 2024 Loans Individually evaluated for credit losses	$	-	$	-	$	567	$	567
December 31, 2023 Loans Individually evaluated for credit losses	$	-	$	-	$	583	$	583

Loans individually evaluated for credit losses are those that are accounted for under existing Financial Accounting Standards Board (“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

25

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

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 June 30, 2024, of the loans individually evaluated for credit losses having an aggregate balance of $3.2 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 $691 thousand in loans individually evaluated for credit losses, an aggregate valuation allowance of $124 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 June 30, 2024 and December 31, 2023, 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)
June 30, 2024:
Loans Individually evaluated for credit losses	$	567	Appraisal of real estate collateral	Appraisal adjustments (1)	0% to -25% (-25.0%)
			and pending agreement of sale	Liquidation expenses (2)	0% to -7.5% (-7.5%)
December 31, 2023:
Loans Individually evaluated for credit losses	$	583	Appraisal of real estate collateral	Appraisal adjustments (1)	0% to -25% (-24.8%)
			and pending agreement of sale	Liquidation expenses (2)	0% to -10.0% (-7.5%)

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.

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26

Embassy Bancorp, Inc.

Notes to Consolidated Financial Statements (Unaudited)

The estimated fair values of the Company’s financial instruments were as follows at June 30, 2024 and December 31, 2023:

						(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)
June 30, 2024:
Financial assets:
Cash and cash equivalents	$	135,886	$	135,886	$	135,886	$	-	$	-
Securities available-for-sale		258,812		258,812		-		258,812		-
Loans receivable, net of allowance		1,250,478		1,135,668		-		-		1,135,668
Restricted investments in bank stock		1,038		1,038		-		1,038		-
Accrued interest receivable		3,413		3,413		-		3,413		-
Financial liabilities:
Deposits		1,567,600		1,563,128		-		1,563,128		-
Securities sold under agreements to
repurchase and federal funds purchased		19,577		19,577		-		19,577		-
Accrued interest payable		7,783		7,783		-		7,783		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-
December 31, 2023:
Financial assets:
Cash and cash equivalents	$	78,923	$	78,923	$	78,923	$	-	$	-
Securities available-for-sale		276,060		276,060		-		276,060		-
Loans receivable, net of allowance		1,241,578		1,150,233		-		-		1,150,233
Restricted investments in bank stock		2,458		2,458		-		2,458		-
Accrued interest receivable		3,298		3,298		-		3,298		-
Financial liabilities:
Deposits		1,476,233		1,472,497		-		1,472,497		-
Securities sold under agreements to
repurchase and federal funds purchased		15,237		15,237		-		15,237		-
Short-term borrowings		35,000		35,000		-		35,000		-
Accrued interest payable		7,844		7,844		-		7,844		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-

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 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 June 30, 2024 and for the three and six months ended June 30, 2024 and 2023, 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, 2023 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, 2023. 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 credit losses and the appropriate level of the allowance for credit losses. Additional information is contained in this Form 10-Q under the paragraphs titled “Provision for Credit Losses” and “Credit Risk and Loan Quality,” 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:

the impact of adverse conditions in the economy and financial markets, including increasing or elevated interest rates, on the performance of the Company's loan portfolio and demand for the Company's products and services;

the potential impacts of recent events affecting the financial services industry on the Company, including increased competition for, and costs of, deposits and other funding sources, more stringent regulatory requirements relating to liquidity and interest rate risk management and capital adequacy and increased FDIC insurance expenses;

the effects of actions by the federal government, including those of the Federal Reserve Board and other government agencies, that impact the money supply and market interest rates;

the effects of market interest rates, and the relative balances of interest rate-sensitive assets to interest rate-sensitive liabilities, on net interest margin and net interest income;

the composition of the Company's loan portfolio, including commercial real estate and residential real estate, which collectively represent a majority of the loan portfolio, may expose the Company to increased credit risk;

the effects of changes in interest rates on demand for the Company's products and services;

investment securities gains and losses, including declines in the fair value of securities which may result in changes to earnings or shareholders' equity;

the effects of changes in interest rates or disruptions in liquidity markets on the Company's sources of funding;

capital and liquidity strategies, including the Company's ability to comply with applicable capital and liquidity requirements, and the Company's ability to generate capital internally or raise capital on favorable terms;

the effects of competition on deposit rates and growth, loan rates and growth and net interest margin;

the impact of operational risks, including the risk of human error, inadequate or failed internal processes and systems, computer and telecommunications systems failures, faulty or incomplete data and an inadequate risk management framework;

the loss of, or failure to safeguard, confidential or proprietary information;

the Company's failure to identify and adequately and promptly address cybersecurity risks, including data breaches and cyberattacks;

the impact of failures from third-party vendors upon which the Company relies to perform in accordance with contractual arrangements and the effects of concerns about other financial institutions on the Company;
‎

28

the potential effects of increases in non-performing assets, which may require the Company to increase the allowance for credit losses, charge-off loans and incur elevated collection and carrying costs related to such non-performing assets;

the determination of the allowance for credit losses, which depends significantly upon assumptions and judgments with respect to a variety of factors, including the performance of the loan portfolio, the weighted-average remaining lives of different classifications of loans within the loan portfolio and current and forecasted economic conditions, among other factors;

the effects of the extensive level of regulation and supervision to which the Company and Bank are subject;

changes in regulation and government policy, which could result in significant changes in banking and financial services regulation;

the continuing impact of the Dodd-Frank Act on the Company’s business and results of operations;

the potential for negative consequences resulting from regulatory violations, investigations and examinations, including potential supervisory actions, the assessment of fines and penalties, the imposition of sanctions, the need to undertake remedial actions and possible damage to the Company’s reputation;

the effects of adverse outcomes in litigation and governmental or administrative proceedings;

the effects of changes in U.S. federal, state or local tax laws;

the effects of the significant amounts of time and expense associated with regulatory compliance and risk management;

geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad;

public health crises and pandemics and their effects on the economic and business environments in which the Company operates, including on the Company’s credit quality and business operations, as well as the impact on general economic and financial market conditions;

the Company’s ability to achieve its growth plans;

the Company’s ability to attract and retain talented personnel;

the effects of competition from financial service companies and other companies offering bank services;

the Company’s ability to keep pace with technological changes;

the effects of negative publicity on the Company’s reputation; and

other factors that may affect future results of the Company, as well as the risks described in the Company’s Form 10-K for the year ended December 31, 2023 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.

At June 30, 2024, the Company continued to be in a strong financial and operational condition. The Bank’s June 30, 2024 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 at June 30, 2024 was 0.06% and the ratio of non-performing assets to total assets was 0.05%. The Company had its last Community Reinvestment Act (“CRA”) examination in 2022 and received a “satisfactory” rating.

The Company’s assets increased by $60.2 million from $1.66 billion at December 31, 2023 to $1.72 billion at June 30, 2024. The increase was due to a $57.0 million increase in cash and cash equivalents, an increase of $8.9 million in net loans receivable and an increase of $9.6 million in bank owned life insurance, offset by a decrease of $17.2 million in securities available for sale and a decrease of $1.4 million in restricted investment in bank stock. The $57.0 million increase in cash and cash equivalents was due to an increase in deposits of $91.4 million, an increase in securities sold under agreement to repurchase of $4.3 million, $10.7 million in principal pay downs on mortgage-backed securities and maturities within the securities available for sale portfolio, and the repurchase

29

of $1.4 million in restricted investment of bank stock, offset by a decrease in short term borrowings of $35.0 million, the net loan growth of $8.9 million, and the purchase of $9.0 million of bank owned life insurance policies in the first quarter of 2024. The $17.2 million decrease in securities was net of an increase in unrealized losses of $6.7 million. The current unrealized loss position of the securities portfolio is due to increasing market interest rates in response to economic conditions since purchase and not due to the credit quality of the investment portfolio. The Company's deposits increased by $91.4 million from $1.48 billion at December 31, 2023 to $1.57 billion at June 30, 2024. The increase in deposits was due to a $23.1 million increase in non-interest bearing deposits and an increase of $68.2 million in interest bearing deposits. The slight shift out of savings into time deposits is primarily, due to competitive pressure of time deposits yielding higher rates in the current rate environment. The Company continues to seek deposits using a highly effective relationship building, sales and marketing effort, which serves 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. The Company’s success to attract new deposit relationships is, in part, due to the increased usage of the Company’s online banking platform, competitively offered rates, and the continued convenience and efficiency of our branch network and branch personnel. The Company continues to gain new deposit opportunities created by mergers in prior years, name changes, competitive branch hour and service adjustments and/or closures in the Company’s market area, and attracting new customers looking to relocate to a local, reputable community bank.

Net loans receivable increased by $8.9 million to $1.25 billion at June 30, 2024, as compared to $1.24 billion at December 31, 2023. The market continues to be very competitive and the Company is committed 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 pipeline, 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 the interest rate exposure of its interest-bearing assets and liabilities. See expanded discussion under the Financial Condition: Loans section below.

Net income for the three months ended June 30, 2024 was $2.5 million compared to net income for the three months ended June 30, 2023 of $3.0 million, a decrease of $555 thousand, or 18.2%. Basic and diluted earnings per share decreased to $0.33 for the three months ended June 30, 2024, as compared to $0.40 for the three months ended June 30, 2023. The difference in net income for the three months ended June 30, 2024 and June 30, 2023 resulted primarily from an increase in interest expense of $3.1 million, or 74.4%, due to the rapid increased rate environment, as well as a slight increase in non-interest expense; offset by a $2.0 million increase in interest income, an increase in non-interest income, and a decrease in the (credit) provision for credit losses.

Net income for the six months ended June 30, 2024 was $5.0 million compared to net income for the six months ended June 30, 2023 of $6.8 million, a decrease of $1.8 million, or 26.4%. Basic and diluted earnings per share decreased to $0.66 for the six months ended June 30, 2024, as compared to $0.90 for the six months ended June 30, 2023. The difference in net income for the six months ended June 30, 2024 and June 30, 2023 resulted primarily from an increase in interest expense of $6.6 million, or 93.9%, due to the rapid increased rate environment; offset by a $3.3 million increase in interest income, an increase in non-interest income, a decrease in non-interest expenses, and a decrease in the (credit) provision for credit losses.

The Company believes that there may be future compressions to the net interest margin over the next six months as older time deposits mature at higher interest rates, although this compression could be less significant than prior compression experienced. The Company continues to evaluate and consider implementing various strategies to mitigate the potential impact of future market rate increases or no future market rate decreases. This includes interest rate swaps and adjustments to the investment portfolio. In addition, in order to mitigate against rising non-interest expenses, management is in the process of evaluating the availability and feasibility of various potential operational efficiencies.

‎

30

RESULTS OF OPERATIONS

Net Interest Income

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 the use of this measure provides meaningful information to the reader of the consolidated financial statements when comparing taxable and nontaxable 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 2024 and 2023.

Total interest income for the three months ended June 30, 2024 increased $2.0 million to $16.1 million, as compared to $14.2 million for the three months ended June 30, 2023. Average earning assets were $1.60 billion for the three months ended June 30, 2024 as compared to $1.57 billion for the three months ended June 30, 2023. The tax equivalent yield on average earning assets was 4.08% for the second quarter of 2024 compared to 3.64% for the second quarter of 2023.

Total interest expense for the three months ended June 30, 2024 increased $3.1 million to $7.2 million, as compared to $4.1 million for the three months ended June 30, 2023. Average interest bearing liabilities were $1.21 billion for the three months ended June 30, 2024 and $1.17 billion for the three months ended June 30, 2023. The yield on average interest bearing liabilities was 2.41% and 1.43% for the second quarter of 2024 and 2023, respectively.

Net interest income for the three months ended June 30, 2024 was $8.9 million, compared to $10.0 million for the three months ended June 30, 2023. The decrease in net interest income is, in part, the result of a decrease in the average balance of taxable investments and non-taxable investments, an increase in the average balance of certificates of deposit, an increase in the average balance of NOW and money markets, and an increase in the average balances of securities under the agreement to repurchase, along with an increase in the rates of interest bearing demand deposits, NOW, money market, savings, certificates of deposit, and securities under agreements to repurchase. The decrease in net interest income was offset by an increase in the average balances of taxable and non-taxable loans, an increase in the average balances of interest bearing deposits with banks and fed funds sold, along with an increase in the rates of taxable and non-taxable loans, taxable investments, non taxable investments, federal funds sold, and interest bearing deposits with banks. Also offsetting the decrease in net interest income was a decrease in the average balance of savings. The Company’s net interest margin is 2.23% on a US GAAP basis and 2.27% on a tax equivalent (non-US GAAP) basis for the three months ended June 30, 2024, as compared to 2.55% on a US GAAP basis and 2.59% on a tax equivalent (non-US GAAP) basis for the three months ended June 30, 2023.

Total interest income for the six months ended June 30, 2024 increased $3.3 million to $31.2 million, as compared to $27.9 million for the six months ended June 30, 2023. Average earning assets were $1.58 billion for the six months ended June 30, 2024 as compared to $1.57 billion for the six months ended June 30, 2023. The tax equivalent yield on average earning assets was 4.01% for the six months ended June 30, 2024 compared to 3.61% for the six months ended June 30, 2023.

Total interest expense for the six months ended June 30, 2024 increased $6.6 million to $13.6 million, as compared to $7.0 million for the six months ended June 30, 2023. Average interest bearing liabilities were $1.18 billion for the six months ended June 30, 2024 and $1.16 billion for the six months ended June 30, 2023. The yield on average interest bearing liabilities was 2.31% and 1.22% for the six months ended June 30, 2024 and 2023, respectively.

Net interest income for the six months ended June 30, 2024 was $17.6 million, compared to $20.9 million for the six months ended June 30, 2023. The decrease in net interest income is, in part, the result of a decrease in the average balance of taxable investments and non-taxable investments, a decrease in the average balances of fed funds sold, an increase in the average balance of certificates of deposit, an increase in the average balance of money markets, and an increase in the average balances of securities under the agreement to repurchase, along with a decrease in the rate of non-taxable investments and an increase in the rates of interest bearing demand deposits, NOW, money market, savings, certificates of deposit, and securities under agreements to repurchase. The decrease in net interest income was offset by an increase in the average balances of taxable and non-taxable loans, an increase in the average balance of interest bearing deposits with banks, along with an increase in the rate of taxable and non-taxable loans, taxable investments, federal funds sold, and interest bearing deposits with banks. Also offsetting the decrease in net interest income was a decrease in the average balances of interest bearing demand deposits, NOW, and savings. The Company’s net interest margin is 2.24% on a US GAAP basis and 2.28% on a tax equivalent (non-US GAAP) basis for the six months ended June 30, 2024, as compared to 2.68% on a US GAAP basis and 2.71% on a tax equivalent (non-US GAAP) basis for the six months ended June 30, 2023.

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31

The tables below sets forth average balances and corresponding yields for the corresponding periods ended June 30, 2024 and 2023, respectively:

Distribution of Assets, Liabilities and Stockholders’ Equity:

Interest Rates and Interest Differential (quarter to date)

	Three Months Ended June 30,
	2024					2023
					Tax					Tax
	Average				Equivalent	Average				Equivalent
	Balance			Interest	Yield	Balance			Interest	Yield
		(Dollars In Thousands)
ASSETS
Loans - taxable (2)	$	1,238,627	$	13,160	4.27%	$	1,209,551	$	11,806	3.91%
Loans - non-taxable (1)		27,211		228	4.26%		19,216		158	4.17%
Investment securities - taxable		218,913		1,402	2.58%		276,516		1,559	2.26%
Investment securities - non-taxable (1)		39,734		296	3.79%		41,169		305	3.76%
Federal funds sold		1,000		13	5.23%		993		12	4.85%
Interest bearing deposits with banks		77,334		1,020	5.30%		24,508		317	5.19%
TOTAL INTEREST EARNING ASSETS		1,602,819		16,119	4.08%		1,571,953		14,157	3.64%
Less allowance for credit losses		(12,422)					(12,639)
Other assets		84,522					74,771
TOTAL ASSETS	$	1,674,919				$	1,634,085
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing demand deposits, ‎   NOW and money market	$	277,007	$	1,131	1.64%	$	239,296	$	357	0.60%
Savings		467,261		1,034	0.89%		578,072		749	0.52%
Certificates of deposit		443,214		4,907	4.45%		335,748		2,948	3.52%
Securities sold under agreements to repurchase ‎and other borrowings		19,361		159	3.30%		13,170		93	2.83%
TOTAL INTEREST BEARING LIABILITIES		1,206,843		7,231	2.41%		1,166,286		4,147	1.43%
Non-interest bearing demand deposits		344,311					350,322
Other liabilities		23,377					20,703
Stockholders' equity		100,388					96,774
TOTAL LIABILITIES AND ‎STOCKHOLDERS' EQUITY	$	1,674,919				$	1,634,085
Net interest income			$	8,888				$	10,010
Tax equivalent adjustments
Loans				61					42
Investments				79					81
Total tax equivalent adjustments				140					123
Net interest income on a tax equivalent basis			$	9,028				$	10,133
Net interest spread (US GAAP basis)					1.63%					2.19%
Net interest margin (US GAAP basis)					2.23%					2.55%
Net interest spread (non-US GAAP basis) (3)					1.67%					2.21%
Net interest margin (non-US GAAP basis) (3)					2.27%					2.59%

(1)Yields on tax exempt assets have been calculated on a fully tax equivalent basis at a tax rate of 21% as of June 30, 2024 and 2023, 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 June 30, 2024 and 2023, respectively.

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32

Distribution of Assets, Liabilities and Stockholders’ Equity:

Interest Rates and Interest Differential (year to date)

		Six Months Ended June 30,
	2024						2023
					Tax					Tax
	Average				Equivalent	Average				Equivalent
	Balance		Interest		Yield	Balance		Interest		Yield
		(Dollars In Thousands)
ASSETS
Loans - taxable (2)	$	1,236,589	$	26,017	4.23%	$	1,200,751	$	23,082	3.88%
Loans - non-taxable (1)		27,268		457	4.26%		17,403		285	4.18%
Investment securities - taxable		223,420		2,818	2.54%		277,891		3,102	2.25%
Investment securities - non-taxable (1)		40,570		594	3.73%		41,222		610	3.78%
Federal funds sold		987		27	5.50%		997		24	4.85%
Interest bearing deposits with banks		49,061		1,303	5.34%		32,189		775	4.86%
TOTAL INTEREST EARNING ASSETS		1,577,895		31,216	4.01%		1,570,453		27,878	3.61%
Less allowance for credit losses		(12,496)					(12,638)
Other assets		82,054					74,455
TOTAL ASSETS	$	1,647,453				$	1,632,270
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing demand deposits,
NOW and money market	$	262,282	$	1,982	1.52%	$	236,638	$	528	0.45%
Savings		475,154		1,988	0.84%		610,638		1,458	0.48%
Certificates of deposit		429,601		9,370	4.39%		301,594		4,882	3.26%
Securities sold under agreements to repurchase ‎and other borrowings		16,979		269	3.19%		13,252		150	2.28%
TOTAL INTEREST BEARING LIABILITIES		1,184,016		13,609	2.31%		1,162,122		7,018	1.22%
Non-interest bearing demand deposits		338,211					355,569
Other liabilities		23,387					19,320
Stockholders' equity		101,839					95,259
TOTAL LIABILITIES AND ‎STOCKHOLDERS' EQUITY	$	1,647,453				$	1,632,270
Net interest income			$	17,607				$	20,860
Tax equivalent adjustments
Loans				121					76
Investments				158					162
Total tax equivalent adjustments				279					238
Net interest income on a tax equivalent basis			$	17,886				$	21,098
Net interest spread (US GAAP basis)					1.67%					2.37%
Net interest margin (US GAAP basis)					2.24%					2.68%
Net interest spread (non-US GAAP basis) (3)					1.70%					2.39%
Net interest margin (non-US GAAP basis) (3)					2.28%					2.71%

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33

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								Six Months Ended
	June 30, 2024								June 30, 2024
	compared to June 30, 2023								compared to June 30, 2023
	(In Thousands)
	Due to change in:								Due to change in:
	Total						# of		Total						# of
	Change		Volume		Rate		Days		Change		Volume		Rate		Days
Interest-earning assets:
Loans - taxable	$	1,354	$	283	$	1,103	$	(32)	$	2,935	$	691	$	2,180	$	64
Loans - non-taxable		70		66		5		(1)		172		163		9		-
Investment securities - taxable		(157)		(324)		171		(4)		(284)		(610)		317		9
Investment securities - non-taxable		(9)		(11)		2		-		(16)		(9)		(9)		2
Federal funds sold		1		-		1		-		3		-		3		-
Interest bearing deposits with banks		703		682		22		(1)		528		408		118		2
Total net change in income on
interest-earning assets		1,962		696		1,304		(38)		3,338		643		2,618		77
Interest-bearing liabilities:
Interest bearing demand deposits,
NOW and money market		774		56		719		(1)		1,454		57		1,396		1
Savings		285		(143)		430		(2)		530		(324)		850		4
Certificates of deposit		1,959		941		1,026		(8)		4,488		2,078		2,397		13
Total deposits		3,018		854		2,175		(11)		6,472		1,811		4,643		18
Securities sold under agreements to
repurchase and other borrowings		66		43		23		-		119		42		76		1
Total net change in expense on
interest-bearing liabilities		3,084		897		2,198		(11)		6,591		1,853		4,719		19
Change in net interest income	$	(1,122)	$	(201)	$	(894)	$	(27)	$	(3,253)	$	(1,210)	$	(2,101)	$	58

Provision for Credit Losses and Reserve for Unfunded Loan Committments

The Company adopted ASC Topic 326 on January 1, 2023, and applied the standard’s provisions as a cumulative-effect adjustment to retained earnings, as of January 1, 2023 (i.e., modified retrospective approach). Upon adoption of the standard, the Company recorded a $188 thousand increase to the allowance for credit losses, which resulted in a $148 thousand after-tax decrease to retained earnings as of January 1, 2023. The tax effect resulted in a $40 thousand increase to deferred tax assets. 

The allowance for credit losses is established through provisions for credit losses charged against income. Loans deemed to be uncollectible are charged against the allowance for credit losses, and subsequent recoveries, if any, are credited to the allowance. The measurement of expected credit losses also applies to off-balance sheet credit exposures such as loan commitments and unused lines of credit.

The allowance for credit losses is maintained at a level management considers to be adequate to provide for losses that can be reasonably anticipated over the expected life of the loans. 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 and forecasted economic conditions and other relevant factors. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant change.

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34

The allowance consists of a collectively evaluated component and an individually evaluated component. The collectively evaluated component covers non-classified loans and classified loans not considered loans individually evaluated for credit losses, and is based on historical loss experience adjusted for forecasting factors and qualitative factors. The individually evaluated component relates to loans that are classified as loans individually evaluated for credit losses and/or restructured. For loans that are classified as loans individually evaluated for credit losses, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the loans individually evaluated for credit losses is lower than the carrying value of that loan.

For the three months ended June 30, 2024, the credit for credit losses on loans was $286 thousand and the provision for credit losses on unused commitments was $3 thousand, compared to provision for credit losses of $110 thousand for the three months ended June 30, 2023. In the three months ended June 30, 2024, there were charge-offs of $11 thousand and no recoveries. In the three months ended June 30, 2023, there were no charge-offs and recoveries of $1 thousand. For the six months ended June 30, 2024, the credit for credit losses on loans was $444 thousand and the provision for credit losses on unused commitments was $89 thousand, compared to provision for credit losses of $110 thousand for the six months ended June 30, 2023. In the six months ended June 30, 2024, there were charge-offs of $11 thousand and recoveries of $240 thousand. In the six months ended June 30, 2023, there were no charge-offs and recoveries of $1 thousand. The (credit) provision for credit losses is a function of the allowance for credit loss methodology that the Company uses to determine the appropriate level of the allowance for inherent credit losses after net charge-offs have been deducted. See the discussion below under “Credit Risk and Loan Quality” regarding the Company’s considerations of its June 30, 2024 allowance for credit loss levels. The allowance for credit losses is $12.2 million as of June 30, 2024, which is 0.97% of total loans receivable, compared to $12.7 million or 1.03% of total loans receivable as of June 30, 2023. At December 31, 2023, the allowance for credit losses was $12.5 million, which represented 0.99% of total loans receivable. Based principally on loan growth, 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 expected 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 credit 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.

The activity in the allowance for credit losses is shown in the following table, as well as period end loans receivable and the allowance for credit losses as a percent of the total loans receivable portfolio:

3

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(In Thousands)
Loans receivable at end of period	$	1,262,132	$	1,243,049	$	1,262,132	$	1,243,049
Allowance for credit losses:
Balance, beginning	$	12,543	$	12,637	$	12,461	$	12,449
Cumulative effect of change in accounting principle		-		-		-		188
(Credit) provision for credit losses		(286)		110		(444)		110
Loans charged off:
Commercial real estate		-		-		-		-
Commercial construction		-		-		-		-
Commercial		-		-		-		-
Residential real estate		-		-		-		-
Consumer		(11)		-		(11)		-
Total loans charged off		(11)		-		(11)		-
Recoveries of loans previously charged off:
Commercial real estate		-		-		240		-
Commercial construction		-		-		-		-
Commercial		-		-		-		-
Residential real estate		-		1		-		1
Consumer		-		-		-		-
Total recoveries		-		1		240		1
Net recoveries		(11)		1		229		1
Balance at end of period	$	12,246	$	12,748	$	12,246	$	12,748
Allowance for credit losses to loans receivable at end of period		0.97%		1.03%		0.97%		1.03%

In addition to the allowance for credit losses, the Company maintains a reserve for unfunded commitments at a level that management believes is adequate to absorb probable losses. At June 30, 2024 and December 31, 2023, a $89 thousand and $0 commitment reserve

35

was reported, respectfully, on the Consolidated Balance Sheets in other liabilities and reported on the Consolidated Statements of Income in (credit) provision for credit losses.

Non-interest Income

Total non-interest income was $704 thousand for the three months ended June 30, 2024 compared to $675 thousand for the same period in 2023. The increase is, in part, attributable to an increase in bank owned life insurance of $43 thousand primarily due to the purchase of $9.0 million of new bank owned life insurance policies and the conversion of $2.0 million in previous BOLI policies to higher yielding BOLI products through a 1035 exchange transaction in the first quarter of 2024. Offsetting this increase is a decrease in merchant and credit card processing fees of $15 thousand.

Total non-interest income was $1.4 million for the six months ended June 30, 2024 compared to $1.3 million for the same period in 2023. The increase is, in part, attributable to an increase in bank owned life insurance of $134 thousand primarily due to the purchase of $9.0 million of new bank owned life insurance policies and the conversion of $2.0 million in previous BOLI policies to higher yielding BOLI products through a 1035 exchange transaction in the first quarter of 2024. Offsetting this increase is a decrease in merchant and credit card processing fees of $19 thousand.

Non-interest Expense

Non-interest expenses remained relatively flat at $6.9 million for the three months ended June 30, 2024 and 2023. The $15 thousand increase in non-interest expenses is, in part, due to an increase of $87 thousand in occupancy and equipment expense, an increase of $71 thousand in data processing due in part to an increase in data processing maintenance contracts and an increase in ATM network fees, offset by credits applied in the second quarter of 2024 and a decrease in escrow management services due to implementation costs of transitioning to a new vendor in 2023. Additional increases in non-interest expenses are attributable to an increase of $22 thousand in loan and real estate expense due primarily to legal loan fees, an increase of $20 thousand in charitable contributions, and an increase of $19 thousand in other expenses. The increases in non-interest expenses were offset, in part, by a decrease of $77 thousand in advertising and promotion expense and a $115 thousand decrease in salaries and employee benefits due to decreases in health insurance cost, incentive and bonus expense, stock grant expense, and non-qualified pension expense, offset by an increase in employee taxes and team compensation due to annual increases in salaries and an increase in the number of employees. The Company had an 8.7% increase in full-time equivalent employees from one hundred four (104) at June 30, 2023 to one hundred thirteen (113) at June 30, 2024. New hires included various branch and operational personnel. The Company’s efficiency ratio, a non-GAAP measure, was 71.7% and 64.2% for the three months ending June 30, 2024 and 2023, respectively.

Non-interest expenses decreased $352 thousand from $13.7 million for the six months ended June 30, 2023 to $13.4 million for the six months ended June 30, 2024. The decrease in non-interest expenses is, in part, attributable to a $391 thousand decrease in salaries and employee benefits due to decreases in health insurance cost, stock grant expense, incentive and bonuses expense, temporary agency services expense, and non-qualified pension expense, offset by an increase in team compensation due to annual increases in salaries and an increase in the number of employees. Additional decreases in non-interest expenses are attributable to a decrease of $177 thousand in advertising and promotion expense and a decrease of $85 thousand in data processing expense due to credits applied during the six months ended June 30, 2024 and a decrease in escrow management services due to implementation costs of transitioning to a new vendor in 2023, offset by an increase in data processing maintenance contracts and an increase in network support expense. The decreases in non-interest expenses were offset, in part, by an increase of $116 thousand in occupancy and equipment expense, an increase of $32 thousand in professional fees primarily due to legal expenses, and an increase of $129 thousand in other expenses. The increase of $129 thousand in other expenses is due, in part, to increases in bank shares tax, losses from check fraud, cash over and short, and other operating expenses, offset by decreases in debit card fraud and dispute losses and wire fraud losses. The Company’s efficiency ratio, a non-GAAP measure, was 70.3% and 61.9% for the six months ending June 30, 2024 and 2023, respectively.

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 June 30, 2024 totaled $506 thousand, or 16.9% of income before taxes, compared to income taxes for the three months ended June 30, 2023 totaling $666 thousand, or 17.9% of income before taxes. The decrease in the tax rate is, in part, the result of an increase in income on bank owned life insurance and the result of the change in the mix of taxable and tax free loans and investments.

The provision for income taxes for the six months ended June 30, 2024 totaled $993 thousand, or 16.5% of income before taxes, compared to income taxes for the six months ended June 30, 2023 totaling $1.5 million, or 18.2% of income before taxes. The decrease in the tax rate is, in part, the result of an increase in income on bank owned life insurance and the result of the change in the mix of taxable and tax free loans and investments.

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36

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, government agency bonds, and Treasury bonds. The Company holds no high-risk or direct internationally exposed securities or derivatives as of June 30, 2024. The Company has not made any investments in non-U.S. government agency mortgage backed securities or sub-prime loans. The current liquidity of the portfolio has been impacted by the increase in market interest rates. Selling of securities would not be expected as a primary source of short term liquidity given the unrealized losses currently in the portfolio.

Total securities at June 30, 2024 were $258.8 million compared to $276.1 million at December 31, 2023. The decrease in the investment portfolio resulted from principal pay downs on mortgage-backed securities, the maturity of one (1) non-taxable municipal bond, and the maturity of one (1) Treasury bond totaling $10.7 million, as well as an increase in unrealized losses of $6.7 million. The carrying value of the securities portfolio as of June 30, 2024 includes a net unrealized loss of $62.0 million, which is recorded as accumulated other comprehensive loss in stockholders’ equity net of income tax effect. This compares to a net unrealized loss of $55.3 million at December 31, 2023. The current unrealized loss position of the securities portfolio is due to increasing market interest rates in 2022 through 2023 in response to economic conditions since initial purchase. Management determined the Company does not have the intent to sell, nor is it more likely than not that it will be required to sell securities in an unrealized loss position at June 30, 2024. Further, management reviewed the Company's securities as of June 30, 2024 and concluded there were no credit-related declines in fair value. The effective duration of the securities portfolio remains between approximately 7 to 8 years at June 30, 2024. In July 2024, the Company purchased $20.0 million of securities.

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 increased by $8.9 million to $1.25 billion at June 30, 2024 from $1.24 billion at December 31, 2023. The gross loan-to-deposit ratio decreased to 81% at June 30, 2024, compared to 85% at December 31, 2023. The Company’s loan portfolio at June 30, 2024 was comprised of residential real estate and consumer loans of $668.3 million, an increase of $4.6 million from December 31, 2023, and commercial loans of $593.9 million, an increase of $4.0 million from December 31, 2023. The Company has not originated, nor does it intend to originate, sub-prime mortgage loans.

Credit Risk and Loan Quality

The Company’s allowance for credit losses decreased $215 thousand to $12.2 million at June 30, 2024, compared to $12.5 million at December 31, 2023. At June 30, 2024 and December 31, 2023, the allowance for credit losses represented 0.97% and 0.99% of total loans receivable, respectively. The Company’s non-performing loans to total loans receivable were 0.06% at June 30, 2024, compared to 0.02% at June 30, 2023, and 0.03% at December 31, 2023. In the three months ended June 30, 2024, there were charge-offs of $11 thousand and no recoveries. In the three months ended June 30, 2023, there were no charge-offs and recoveries of $1 thousand. In the six months ended June 30, 2024, there were charge-offs of $11 thousand and $240 thousand of recoveries. In the six months ended June 30, 2023, there were no charge-offs and recoveries of $1 thousand. The aggregate balances on non-performing loans are included in the following table.

At June 30, 2024 approximately 95% of the Company’s loan portfolio is collateralized by real estate. Our loan portfolio includes a large amount of commercial real estate loans. Management believes the commercial real estate loan portfolio is well-diversified. At June 30, 2024 and December 31, 2023, high volatility commercial real estate exposures were $8.4 million and $7.4 million, respectively. Commercial real estate loans are originated primarily within Lehigh and Northampton counties, are within the Company’s underwriting criteria, and generally include the guarantee of one or more of the borrowers’ affiliates. At June 30, 2024, the Company’s office space portfolio included no exposure to properties in major metropolitan markets. Commercial real estate loans have drawn the attention of the regulators in recent years as a potential source of risk. The Company monitors these types of loans closely, obtaining updated appraisals on loans when required. As detailed in the Allowance for Credit Losses table, the Company had no charge-offs in this category in 2024 or 2023. The Company believes it has taken the appropriate steps to implement appropriate risk management practices for its commercial real estate loan portfolio, which are subject to regulatory examination.

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37

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

		June 30, 2024		December 31, 2023		June 30, 2023
	(In Thousands)
Non-accrual - commercial	$	-	$	-	$	-
Non-accrual - consumer		292		366		300
Loans past due 90 or more days, accruing interest		496		-		-
Total nonperforming loans		788		366		300
Foreclosed assets		-		-		-
Total nonperforming assets	$	788	$	366	$	300
Nonperforming loans to total loans		0.06%		0.03%		0.02%
Nonperforming assets to total assets		0.05%		0.02%		0.02%
Non-accrual loans to total loans		0.02%		0.03%		0.02%
Allowance to non-accrual loans		4193.84%		3404.64%		4249.33%
Net charge-offs (recoveries) to average loans		-0.02%		0.00%		0.00%

Premises and Equipment

Company premises and equipment, net of accumulated depreciation, decreased $208 thousand from December 31, 2023 to June 30, 2024. This decrease is due to depreciation on existing premises and equipment, offset by new purchases.

Deposits

Total deposits at June 30, 2024 increased by $91.4 million to $1.57 billion from $1.48 billion at December 31, 2023. The increase in the Company’s deposits was due to an increase of $75.2 million in demand, NOW and money market deposits and an increase of $48.0 million in time deposits, offset by a $31.7 million decrease in savings deposits. The slight shift from savings to time deposits is primarily due to higher yielding rates on time deposits, due to competitive pressure and the current rate environment. Included in the above mentioned increase was a $23.6 million increase in non-interest bearing demand business deposits, offset by a $486 thousand decrease in non-interest bearing demand personal deposits. Included in total deposits at June 30, 2024 were personal deposits of $1.11 billion, business deposits of $363.8 million, and municipal deposits of $98.0 million. Included in total deposits at December 31, 2023 were personal deposits of $1.09 billion, business deposits of $293.6 million, and municipal deposits of $89.5 million. The estimated amount of uninsured assessable deposits, including related interest accrued and unpaid, at June 30, 2024 and December 31, 2023 was $532.9 million and $464.3 million, respectively.

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 $135.9 million at June 30, 2024, compared to $78.9 million at December 31, 2023.

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. As noted above, selling of securities would not be a primary source of short term liquidity given the unrealized losses currently in the portfolio. At June 30, 2024, the Company had $258.8 million of available for sale securities. Securities with a carrying value of $159.9 million and $145.7 million at June 30, 2024 and December 31, 2023, 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 June 30, 2024, the Bank had a maximum borrowing capacity for short-term and long-term FHLB advances of approximately $804.9 million, of which $804.8 million is available for borrowing at June 30, 2024 due to an outstanding letter of credit in the amount of $160 thousand. This borrowing capacity with the FHLB includes a line of credit of $150.0 million. There were no short-term or long-term FHLB advances outstanding as of June 30, 2024. There were $35.0 million short-term FHLB advances outstanding and no long-term FHLB advances outstanding as of December 31, 2023. 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 June 30, 2024 and December 31, 2023. Advances from this line are unsecured.

The Bank is also eligible to borrow under the Federal Reserve Bank’s discount window borrowing programs.

Effective August 1, 2024, the FHLB maximum borrowing capacity formula will be changing for all member banks with assets less than $100 billion. It is estimated that the Bank’s maximum borrowing capacity will be reduced by $120 million as a result of the new guidance.
‎

38

The Company has a revolving line of credit facility with the ACBB of $7.5 million, of which none was outstanding at June 30, 2024 and December 31, 2023. Advances from this line are unsecured.

The Bank is a member of the Certificate of Deposit Account Registry Services (CDARS) program and the Insured Cash Sweep (ICS) program offered by Promontory Interfinancial Network, LLC. CDARS is a funding and liquidity management tool used by banks to access funds and manage their balance sheet. ICS provides liquidity similar to a money market or savings account. Both programs enable financial institutions to provide customers with full FDIC insurance on deposits over $250 thousand that are placed in the program. The Bank also has access to other brokered deposits as a source of liquidity.

Because of the composition of the Company’s balance sheet, its strong capital base, ability to attract new deposit relationships, access to brokered deposits, and borrowing capacity, the Company believes that it remains well positioned with respect to liquidity. The majority of the Company’s funds are invested in loans with a portion invested in investment securities that generally carry a lower yield. While it is desirable to be liquid, it has the effect of a lower interest margin. 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 the 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 $168.8 million and $182.7 million at June 30, 2024 and December 31, 2023, respectively. At June 30, 2024 there was a $89 thousand allowance for credit losses required for off-balance sheet arrangements and $0 at December 31, 2023. At June 30, 2024 and December 31, 2023, the Company had letters of credit outstanding of $8.8 million and $9.0 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.

Capital Resources and Adequacy

Total stockholders’ equity was $102.6 million as of June 30, 2024, representing a net decrease of $3.0 million from December 31, 2023. The decrease in capital was primarily the result of an increase of $5.3 million in accumulated other comprehensive loss and dividends declared of $3.2 million, offset by net income of $5.0 million, an increase in common stock of $22 thousand, and an increase in surplus of $413 thousand due to employee stock purchases and stock grants with compensation expense. The accumulated other comprehensive losses are excluded from both the Bank’s and the Company’s Tier 1 regulatory capital calculations.

The Company’s tangible book value per share, calculated as total stockholders’ equity divided by outstanding common stock shares, was $13.47 and $13.91 at June 30, 2024 and December 31, 2023, respectively. The Company’s tangible book value per share not including accumulated other comprehensive loss in the total stockholders’ equity numerator (a non-GAAP measure) was $19.90 and $19.66 at June 30, 2024 and December 31, 2023, respectively. The Company believes this non-GAAP measurement enhances the overall understanding of Company performance and increases comparability of period to period results, but should not be viewed as a substitute for the measure as determined in accordance with GAAP or an inference that future results will be unaffected by similar adjustments to be determined in accordance with GAAP.

The following table presents the computation of this non-GAAP based measure shown together with its most directly comparable GAAP measure:

	June 30, 2024		December 31, 2023
	(Dollars In Thousands Except Per Share Data)
Tangible Book Value Per Share
Total stockholders' equity	$	102,620	$	105,655
Addback: accumulated other comprehensive loss ("AOCL")		48,999		43,700
Total stockholders' equity not included AOCL (non-GAAP)	$	151,619	$	149,355
Common stock shares outstanding		7,617,680		7,596,236
Book value per share (most directly comparable GAAP based measure)	$	13.47	$	13.91
AOCL per share		6.43		5.75
Book value per share not including AOCL (non-GAAP)	$	19.90	$	19.66

‎

39

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 1 capital (as defined in the regulations) to risk weighted assets (as defined in the regulations), and Tier 1 capital to average assets (as defined in the regulations). As of June 30, 2024, 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.

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

Consolidated Bank
	June 30, 2024			December 31, 2023
	(Dollars In Thousands)
Tier 1, common stockholders' equity	$	151,453		$	149,299
Tier 2, allowable portion of allowance for credit losses		12,335			12,461
Total capital	$	163,788		$	161,760
Common equity tier 1 capital ratio		13.4	%		13.3	%
Tier 1 risk based capital ratio		13.4	%		13.3	%
Total risk based capital ratio		14.5	%		14.5	%
Tier 1 leverage ratio		8.8	%		8.9	%

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 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.

‎

40

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

Consolidated Corporation
	June 30, 2024			December 31, 2023
	(Dollars In Thousands)
Tier 1, common stockholders' equity	$	151,619		$	149,355
Tier 2, allowable portion of allowance for credit losses		12,335			12,461
Total capital	$	163,954		$	161,816
Common equity tier 1 capital ratio		13.4	%		13.3	%
Tier 1 risk based capital ratio		13.4	%		13.3	%
Total risk based capital ratio		14.5	%		14.5	%
Tier 1 leverage ratio		8.8	%		8.9	%

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

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. Beginning in 2022 thru 2023, the Federal Reserve raised its key interest rate in an attempt to tame inflation. 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.

Because income simulations assume that the Company’s balance sheet will remain static over the simulation horizon, the results do not reflect adjustments in strategy that management could implement in response to rate shifts. Computations of future effects of hypothetical interest rate changes are based on numerous assumptions and should not be relied upon as indicative of actual results. Assets and liabilities may react differently than projected to changes in market interest rates. The interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while rates on other types of assets and liabilities may lag changes in market interest rates. Interest rate shifts may not be parallel.

Based on a twelve-month forecast of the balance sheet, the following table sets forth the Company’s interest rate risk profile at June 30, 2024. For income simulation purposes, personal and business savings accounts reprice every two months, personal and business NOW accounts reprice every two months and personal, and business money market accounts reprice every month. Management reviews all assumptions on a periodic basis and believes current assumptions support market conditions. 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	3.4%
Up 100 basis points	-3.1%
Up 200 basis points	-6.7%

‎

41

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 June 30, 2024, 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 June 30, 2024, including any corrective actions with regard to significant deficiencies and material weakness.

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, the reader should carefully consider the factors discussed in “Risk Factors” included within the Company’s 2023 Form 10-K and subsequent filings with the SEC. There are no material changes to such risk factors. Such risks are not the only risks facing the Company. 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

None.

Item 3 - Defaults Upon Senior Securities

None.

Item 4 – Mine Safety Disclosures

None.

Item 5 - Other Information

During the three months ended June 30, 2024, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company’s common stock that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” as such term is defined in Item 408(c) of Regulation S-K.

‎

42

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-K filed on March 18, 2022).
3.2	Amended and Restated By-Laws (conformed) (Incorporated by reference to Exhibit 3.2 of Registrant's
	Form 10-K filed on March 18, 2022).
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.

‎

43

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: August 12, 2024	By:	/s/ David M. Lobach, Jr.
		David M. Lobach, Jr.
		President and Chief Executive Officer
Dated: August 12, 2024	By:	/s/ Judith A. Hunsicker
		Judith A. Hunsicker
		First Executive Officer,
		Chief Operating Officer, Secretary and
		Chief Financial Officer

‎

44

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: August 12, 2024

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: August 12, 2024

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 endingJune 30, 2024  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: August 12, 2024

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2024	Aug. 02, 2024
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Document Fiscal Year Focus	2024
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
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		7,617,680
Entity Central Index Key	0001449794
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
ASSETS
Cash and due from banks	$ 17,633	$ 16,133
Interest bearing demand deposits with banks	117,253	61,790
Federal funds sold	1,000	1,000
Cash and Cash Equivalents	135,886	78,923
Securities available for sale	258,812	276,060
Restricted investment in bank stock	1,038	2,458
Loans receivable, net of allowance for credit losses of $12,246 in 2024; $12,461 in 2023	1,250,478	1,241,578
Premises and equipment, net of accumulated depreciation	3,526	3,734
Bank owned life insurance	35,866	26,310
Accrued interest receivable	3,413	3,298
Other assets	27,681	24,135
Total Assets	1,716,700	1,656,496
Deposits:
Non-interest bearing	351,810	328,669
Interest bearing	1,215,790	1,147,564
Total Deposits	1,567,600	1,476,233
Securities sold under agreements to repurchase	19,577	15,237
Short-term borrowings		35,000
Accrued interest payable	7,783	7,844
Other liabilities	19,120	16,527
Total Liabilities	1,614,080	1,550,841
Stockholders' Equity:
Common stock, $1 par value; authorized 20,000,000 shares; 2024 issued 7,779,691 shares; outstanding 7,617,680 shares; 2023 issued 7,758,247 shares; outstanding 7,596,236 shares;	7,780	7,758
Surplus	28,659	28,246
Retained earnings	117,847	116,018
Accumulated other comprehensive loss	(48,999)	(43,700)
Treasury stock, at cost: 162,011 shares at June 30, 2024 and December 31, 2023, respectively	(2,667)	(2,667)
Total Stockholders' Equity	102,620	105,655
Total Liabilities and Stockholders' Equity	$ 1,716,700	$ 1,656,496

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Consolidated Balance Sheets [Abstract]
Loans receivable, allowance	$ 12,246	$ 12,461
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	7,779,691	7,758,247
Common stock, shares outstanding	7,617,680	7,596,236
Treasury stock, shares	162,011	162,011

XML

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
INTEREST INCOME
Loans, including fees	$ 13,388	$ 11,964	$ 26,474	$ 23,367
Securities, taxable	1,402	1,559	2,818	3,102
Securities, non-taxable	296	305	594	610
Short-term investments, including federal funds sold	1,033	329	1,330	799
Total Interest Income	16,119	14,157	31,216	27,878
INTEREST EXPENSE
Deposits	7,072	4,054	13,340	6,868
Securities sold under agreements to repurchase and federal funds purchased	159	86	264	143
Short-term borrowings		7	5	7
Total Interest Expense	7,231	4,147	13,609	7,018
Net Interest Income	8,888	10,010	17,607	20,860
(CREDIT) PROVISION FOR CREDIT LOSSES	(283)	110	(355)	110
Net Interest Income after (Credit) Provision for Credit Losses	9,171	9,900	17,962	20,750
OTHER NON-INTEREST INCOME
Merchant and credit card processing fees	79	94	163	182
Debit card interchange fees	236	232	443	449
Other service fees	154	157	305	310
Bank owned life insurance	235	192	526	392
Total Other Non-Interest Income	704	675	1,437	1,333
OTHER NON-INTEREST EXPENSES
Salaries and employee benefits	3,477	3,592	6,927	7,318
Occupancy and equipment	1,036	949	2,052	1,936
Data processing	830	759	1,445	1,530
Advertising and promotion	203	280	390	567
Professional fees	259	261	531	499
FDIC insurance	190	200	378	377
Loan & real estate	67	45	116	97
Charitable contributions	310	290	517	513
Other	505	486	1,022	893
Total Other Non-Interest Expenses	6,877	6,862	13,378	13,730
Income Before Income Taxes	2,998	3,713	6,021	8,353
INCOME TAX EXPENSE	506	666	993	1,519
Net Income	$ 2,492	$ 3,047	$ 5,028	$ 6,834
BASIC EARNINGS PER SHARE	$ 0.33	$ 0.40	$ 0.66	$ 0.90
DILUTED EARNINGS PER SHARE	0.33	0.40	0.66	0.90
DIVIDENDS PER SHARE	$ 0.42	$ 0.40	$ 0.42	$ 0.40

XML

Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Consolidated Statements of Comprehensive (Loss) Income [Abstract]
Net Income	$ 2,492	$ 3,047	$ 5,028	$ 6,834
Change in Accumulated Other Comprehensive Loss:
Unrealized holding (loss) gain on securities available for sale	(685)	(881)	(6,708)	3,367
Less: reclassification adjustment for realized gains
Total other comprehensive income (loss), before tax	(685)	(881)	(6,708)	3,367
Income tax effect	144	185	1,409	(707)
Net unrealized (loss) gain	(541)	(696)	(5,299)	2,660
Other comprehensive (loss) income, net of tax	(541)	(696)	(5,299)	2,660
Comprehensive (Loss) Income	$ 1,951	$ 2,351	$ (271)	$ 9,494

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member] Director [Member]	Common Stock [Member]	Surplus [Member] Director [Member]	Surplus [Member]	Retained Earnings [Member] Cumulative Effect from Change in Accounting Principle [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Stock [Member]	Director [Member]	Cumulative Effect from Change in Accounting Principle [Member]	Total
BALANCE-Beginning at Dec. 31, 2022		$ 7,740		$ 27,627	$ (148)	$ 106,551	$ (51,107)	$ (2,535)		$ (148)	$ 88,276
Net income						3,787					3,787
Other comprehensive income (loss), net of tax							3,356				3,356
Common stock grants	$ 14		$ 243						$ 257
Compensation expense recognized on stock grants, net of unearned compensation expense				82							82
Shares issued under employee stock purchase plan		1		15							16
BALANCE-Ending at Mar. 31, 2023		7,755		27,967		110,190	(47,751)	(2,535)			95,626
BALANCE-Beginning at Dec. 31, 2022		7,740		27,627	$ (148)	106,551	(51,107)	(2,535)		$ (148)	88,276
Net income											6,834
Other comprehensive income (loss), net of tax											2,660
BALANCE-Ending at Jun. 30, 2023		7,756		28,061		110,196	(48,447)	(2,535)			95,031
BALANCE-Beginning at Mar. 31, 2023		7,755		27,967		110,190	(47,751)	(2,535)			95,626
Net income						3,047					3,047
Other comprehensive income (loss), net of tax							(696)				(696)
Dividend declared						(3,041)					(3,041)
Compensation expense recognized on stock grants, net of unearned compensation expense				76							76
Shares issued under employee stock purchase plan		1		18							19
BALANCE-Ending at Jun. 30, 2023		7,756		28,061		110,196	(48,447)	(2,535)			95,031
BALANCE-Beginning at Dec. 31, 2023		7,758		28,246		116,018	(43,700)	(2,667)			105,655
Net income						2,536					2,536
Other comprehensive income (loss), net of tax							(4,758)				(4,758)
Common stock grants	$ 19		$ 248						$ 267
Compensation expense recognized on stock grants, net of unearned compensation expense				67							67
Shares issued under employee stock purchase plan		1		17							18
BALANCE-Ending at Mar. 31, 2024		7,778		28,578		118,554	(48,458)	(2,667)			103,785
BALANCE-Beginning at Dec. 31, 2023		7,758		28,246		116,018	(43,700)	(2,667)			105,655
Net income											5,028
Other comprehensive income (loss), net of tax											(5,299)
BALANCE-Ending at Jun. 30, 2024		7,780		28,659		117,847	(48,999)	(2,667)			102,620
BALANCE-Beginning at Mar. 31, 2024		7,778		28,578		118,554	(48,458)	(2,667)			103,785
Net income						2,492					2,492
Other comprehensive income (loss), net of tax							(541)				(541)
Dividend declared						(3,199)					(3,199)
Compensation expense recognized on stock grants, net of unearned compensation expense				66							66
Shares issued under employee stock purchase plan		2		15							17
BALANCE-Ending at Jun. 30, 2024		$ 7,780		$ 28,659		$ 117,847	$ (48,999)	$ (2,667)			$ 102,620

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Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023
Dividend declared per share	$ 0.42		$ 0.40
Compensation expense recognized on stock grants, unearned compensation expense	$ 198	$ 265	$ 484	$ 560
Shares issued under employee stock purchase plan, shares	1,209	1,393	1,357	939
Director [Member]
Common stock grants, shares		18,843		13,877

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 5,028	$ 6,834
Adjustments to reconcile net income to net cash provided by operating activities:
(Credit) provision for credit losses	(355)	110
Amortization of deferred loan costs	148	112
Depreciation	538	429
Net accretion of investment security premiums and discounts	(205)	(271)
Stock compensation expense	400	415
Income on bank owned life insurance	(526)	(392)
(Increase) decrease in accrued interest receivable	(115)	68
Increase in other assets	(2,137)	(92)
(Decrease) increase in accrued interest payable	(61)	3,823
(Decrease) increase in other liabilities	(606)	43
Net Cash Provided by Operating Activities	2,109	11,079
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available for sale		(4,874)
Maturities, calls and principal repayments of securities available for sale	10,745	10,265
Net increase in loans	(8,693)	(34,660)
Net redemption (purchase) of restricted investment in bank stock	1,420	(1,938)
Purchase of bank owned life insurance	(9,030)
Purchases of premises and equipment	(330)	(422)
Proceeds on bank owned life insurance		29
Net Cash Used in Investing Activities	(5,888)	(31,600)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits	91,367	(16,077)
Net increase (decrease) in securities sold under agreements to repurchase	4,340	(2,867)
(Decrease) increase in short-term borrowings	(35,000)	46,875
Proceeds from Employee Stock Purchase Plan	35	35
Net Cash Provided by Financing Activities	60,742	27,966
Net Increase in Cash and Cash Equivalents	56,963	7,445
CASH AND CASH EQUIVALENTS - BEGINNING	78,923	67,295
CASH AND CASH EQUIVALENTS - ENDING	135,886	74,740
SUPPLEMENTARY CASH FLOWS INFORMATION
Interest paid	13,670	3,195
Income taxes paid	1,036	2,290
Non-cash Investing and Financing Activities:
Dividend declared	$ 3,199	$ 3,041

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Basis of Presentation

6 Months Ended

Jun. 30, 2024

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 and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

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, 2023, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 28, 2024.

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 2023 consolidated financial statements may have been reclassified to conform to 2024 presentation. These reclassifications had no effect on 2023 net income.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

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, 2023.

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Securities Available for Sale

6 Months Ended

Jun. 30, 2024

Securities Available for Sale [Abstract]

Securities Available for Sale

Note 3 – Securities Available For Sale

At June 30, 2024 and December 31, 2023, respectively, the amortized cost and fair values of securities available-for-sale were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
June 30, 2024:
U.S. Treasury securities	$	12,439	$	-	$	(201)	$	12,238
U.S. Government agency obligations		2,474		-		(105)		2,369
Municipal bonds		72,713		19		(14,018)		58,714
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		509		-		(73)		436
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		232,701		-		(47,646)		185,055
Total	$	320,836	$	19	$	(62,043)	$	258,812
December 31, 2023:
U.S. Treasury securities	$	14,867	$	-	$	(277)	$	14,590
U.S. Government agency obligations		2,463		-		(124)		2,339
Municipal bonds		73,128		73		(12,405)		60,796
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		509		-		(67)		442
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		240,409		2		(42,518)		197,893
Total	$	331,376	$	75	$	(55,391)	$	276,060

The amortized cost and fair value of securities as of June 30, 2024, 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	$	9,938	$	9,804
Due after one year through five years		7,323		7,010
Due after five years through ten years		6,875		6,467
Due after ten years		63,490		50,040
		87,626		73,321
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - commercial		509		436
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - residential		232,701		185,055
Total	$	320,836	$	258,812

There were no sales of securities for the three and six months ended June 30, 2024 and 2023.

Securities with a carrying value of $159.9 million and $145.7 million at June 30, 2024 and December 31, 2023, 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 June 30, 2024 and December 31, 2023:

		Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2024:	(In Thousands)
U.S. Treasury securities	$	-	$	-	$	12,238	$	(201)	$	12,238	$	(201)
U.S. Government agency obligations		-		-		2,369		(105)		2,369		(105)
Municipal bonds		12,000		(1,014)		45,615		(13,004)		57,615		(14,018)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
commercial		-		-		436		(73)		436		(73)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
residential		23		-		184,980		(47,646)		185,003		(47,646)
Total Temporarily Impaired Securities	$	12,023	$	(1,014)	$	245,638	$	(61,029)	$	257,661	$	(62,043)
		.
December 31, 2023:
U.S. Treasury securities	$	-	$	-	$	14,590	$	(277)	$	14,590	$	(277)
U.S. Government agency obligations		-		-		2,339		(124)		2,339		(124)
Municipal bonds		5,561		(201)		52,267		(12,204)		57,828		(12,405)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
commercial		-		-		442		(67)		442		(67)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
residential		-		-		197,796		(42,518)		197,796		(42,518)
Total Temporarily Impaired Securities	$	5,561	$	(201)	$	267,434	$	(55,190)	$	272,995	$	(55,391)

The Company had one hundred ninety-six (196) securities in an unrealized loss position at June 30, 2024 and one hundred eighty-nine (189) securities in an unrealized loss position at December 31, 2023. The Company reviews its investment portfolio on a quarterly basis for indications of impairment due to credit-related factors or noncredit-related factors and the Company does not intend to sell the securities and has the intent and ability to hold them for a period of time sufficient for recovery of their amortized cost basis. This review includes analyzing the extent to which the fair value has been lower than the cost, the market liquidity for the investment, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer, and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. Management believes that the unrealized loss only represents temporary impairment of the securities, which are predominantly backed by credit of government agencies, and are a result of the increased market interest rates due to the current economic conditions, and not the credit quality of the issuer. As such, no allowance for credit losses was required on securities available for sale in an unrealized loss position at June 30, 2024 and December 31, 2023.

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Restricted Investment in Bank Stock

6 Months Ended

Jun. 30, 2024

Restricted Investment in Bank Stock [Abstract]

Restricted Investment in Bank Stock

Note 4 – 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 $998 thousand and $2.4 million as of June 30, 2024 and December 31, 2023, respectively. The Bank had ACBB stock at a carrying value of $40 thousand at June 30, 2024 and December 31, 2023.

‎

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 June 30, 2024.

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Loans and Credit Quality

6 Months Ended

Jun. 30, 2024

Loans and Credit Quality [Abstract]

Loans and Credit Quality

Note 5 – Loans and Credit Quality

The following table presents the composition of loans receivable at June 30, 2024 and December 31, 2023, respectively:

	June 30, 2024			December 31, 2023
			Percentage of			Percentage of
	Balance		total Loans	Balance		total Loans
		(Dollars in Thousands)
Commercial real estate	$	535,850	42.46%	$	539,034	43.00%
Commercial construction		19,230	1.52%		16,840	1.34%
Commercial		38,788	3.07%		33,951	2.71%
Residential real estate		667,769	52.91%		663,127	52.90%
Consumer		495	0.04%		565	0.05%
Total loans		1,262,132	100.00%		1,253,517	100.00%
Unearned origination fees		592			522
Allowance for credit losses		(12,246)			(12,461)
Net Loans	$	1,250,478		$	1,241,578

‎

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention (potential weakness), substandard (well defined weakness) and doubtful (full collection unlikely) within the Company's internal risk rating system as of June 30, 2024 by year of origination:

		2024		2023		2022		2021		2020		Prior		Revolving		Total
June 30, 2024		(In Thousands)
Commercial
real estate
	Pass	$	26,187	$	61,255	$	149,545	$	51,128	$	61,118	$	176,099	$	9,291	$	534,623
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		1,227		-		1,227
	Total		26,187		61,255		149,545		51,128		61,118		177,326		9,291		535,850
Commercial
construction
	Pass		1,934		3,215		8,591		5,167		-		29		-		18,936
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		239		55		294
	Total		1,934		3,215		8,591		5,167		-		268		55		19,230
Commercial
	Pass		4,992		2,073		4,272		1,872		3,006		13,941		8,611		38,767
	Special Mention		-		-		-		-		-		21		-		21
	Substandard		-		-		-		-		-		-		-		-
	Total		4,992		2,073		4,272		1,872		3,006		13,962		8,611		38,788
Residential
real estate
	Pass		38,140		69,892		91,967		152,093		135,106		156,511		22,553		666,262
	Special Mention		-		-		-		-		-		432		-		432
	Substandard		-		-		44		-		-		1,031		-		1,075
	Total		38,140		69,892		92,011		152,093		135,106		157,974		22,553		667,769
Consumer
	Pass		75		81		93		16		-		9		221		495
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		-		-		-
	Total		75		81		93		16		-		9		221		495
Total
Loans Receivable		$	71,328	$	136,516	$	254,512	$	210,276	$	199,230	$	349,539	$	40,731	$	1,262,132

The Company had gross charge-offs of $11 thousand during the six months ending June 30, 2024. One (1) charge-off of $5 thousand was a consumer loan originated in 2021 and one (1) charge-off of $6 thousand was a consumer loan originated in 2023.

‎

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention (potential weakness), substandard (well defined weakness) and doubtful (full collection unlikely) within the Company's internal risk rating system as of December 31, 2023 by year of origination:

		2023		2022		2021		2020		2019		Prior		Revolving		Total
December 31, 2023		(In Thousands)
Commercial
real estate
	Pass	$	62,467	$	160,257	$	58,094	$	64,146	$	26,835	$	157,888	$	8,094	$	537,781
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		1,253		-		1,253
	Total		62,467		160,257		58,094		64,146		26,835		159,141		8,094		539,034
Commercial
construction
	Pass		2,071		8,591		5,412		-		440		30		-		16,544
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		241		55		296
	Total		2,071		8,591		5,412		-		440		271		55		16,840
Commercial
	Pass		2,236		4,851		2,260		3,312		5,388		9,311		6,572		33,930
	Special Mention		-		-		-		-		21		-		-		21
	Substandard		-		-		-		-		-		-		-		-
	Total		2,236		4,851		2,260		3,312		5,409		9,311		6,572		33,951
Residential
real estate
	Pass		75,372		96,032		158,135		142,318		46,035		122,252		21,423		661,567
	Special Mention		-		-		-		-		-		443		-		443
	Substandard		-		-		-		-		173		944		-		1,117
	Total		75,372		96,032		158,135		142,318		46,208		123,639		21,423		663,127
Consumer
	Pass		130		118		22		1		13		11		270		565
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		-		-		-
	Total		130		118		22		1		13		11		270		565
Total
Loans Receivable		$	142,276	$	269,849	$	223,923	$	209,777	$	78,905	$	292,373	$	36,414	$	1,253,517

The Company had no loans that were charged off during the year ended December 31, 2023 and therefore no gross charge-off information is presented in the above table.

At June 30, 2024, the Company had no foreclosed assets and had three (3) recorded investment in mortgage loans collateralized by residential real estate property in the process of foreclosure in the amount of $739 thousand. At December 31, 2023, the Company had no foreclosed assets and had one (1) recorded investment in a mortgage loan collateralized by residential real estate property in the process of foreclosure in the amount of $121 thousand.

‎

The following table presents the carrying value and related allowance for credit losses of individually analyzed loans at June 30, 2024 and December 31, 2023, respectively:

	June 30, 2024						December 31, 2023
	Recorded Investment		Unpaid Principal Balance		Related Allowance for Credit Losses		Recorded Investment		Unpaid Principal Balance		Related Allowance for Credit Losses
	(In Thousands)
With no related allowance recorded:
Commercial real estate (1)	$	1,227	$	1,227			$	1,303	$	1,543
Commercial construction (1)		55		55				55		55
Commercial		-		-				-		-
Residential real estate (1)		1,224		1,227				1,202		1,206
Consumer		-		-				-		-
With an allowance recorded:
Commercial real estate	$	-	$	-	$	-	$	-	$	-	$	-
Commercial construction (1)		239		239		20		241		241		22
Commercial (2)		21		21		21		21		21		21
Residential real estate (1)		431		431		83		516		516		152
Consumer		-		-		-		-		-		-
Total:
Commercial real estate	$	1,227	$	1,227	$	-	$	1,303	$	1,543	$	-
Commercial construction		294		294		20		296		296		22
Commercial		21		21		21		21		21		21
Residential real estate		1,655		1,658		83		1,718		1,722		152
Consumer		-		-		-		-		-		-
	$	3,197	$	3,200	$	124	$	3,338	$	3,582	$	195

1.All loans are real estate collateral dependent.

2.All loans are non-collateral dependent loans.

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

	June 30, 2024		December 31, 2023
	(In Thousands)
Commercial real estate	$	-	$	-
Commercial construction		-		-
Commercial		-		-
Residential real estate		292		366
Consumer		-		-
Total	$	292	$	366

As of June 30, 2024, there were three (3) loans in non-accrual status in the amount of $292 thousand. There was no required related allowance for these collateral dependent non-accrual loans. There was no interest income recognized for the three months ended June 30, 2024 and interest income of $1 thousand was recognized for the six months ended June 30, 2024. As of December 31, 2023, there were three (3) loans in non-accrual status in the amount of $366 thousand. There was a required related allowance of $66 thousand for these collateral dependent non-accrual loans.
‎

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 June 30, 2024 and December 31, 2023, 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
June 30, 2024	(In Thousands)
Commercial real estate	$	742	$	-	$	-	$	742	$	535,108	$	535,850	$	-
Commercial construction		-		-		-		-		19,230		19,230		-
Commercial		-		-		-		-		38,788		38,788		-
Residential real estate		607		-		788		1,395		666,374		667,769		496
Consumer		1		-		-		1		494		495		-
Total	$	1,350	$	-	$	788	$	2,138	$	1,259,994	$	1,262,132	$	496
December 31, 2023
Commercial real estate	$	630	$	-	$	-	$	630	$	538,404	$	539,034	$	-
Commercial construction		-		-		-		-		16,840		16,840		-
Commercial		-		-		-		-		33,951		33,951		-
Residential real estate		344		-		193		537		662,590		663,127		-
Consumer		-		-		-		-		565		565		-
Total	$	974	$	-	$	193	$	1,167	$	1,252,350	$	1,253,517	$	-

‎

The following tables detail the activity in the allowance for credit losses for the three and six months ended June 30, 2024 and June 30, 2023, respectively:

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for credit losses	(In Thousands)
Three Months Ending June 30, 2024
Beginning Balance - March 31, 2024	$	6,216	$	237	$	553	$	5,508	$	29	$	-	$	12,543
Charge-offs		-		-		-		-		(11)		-		(11)
Recoveries		-		-		-		-		-		-		-
Provisions (credits) on loans		(199)		(10)		(28)		(70)		21		-		(286)
Ending Balance - June 30, 2024	$	6,017	$	227	$	525	$	5,438	$	39	$	-	$	12,246
Six Months Ending June 30, 2024
Beginning Balance - December 31, 2023	$	6,108	$	195	$	920	$	5,224	$	14	$	-	$	12,461
Charge-offs		-		-		-		-		(11)		-		(11)
Recoveries		240		-		-		-		-		-		240
Provisions (credits) on loans		(331)		32		(395)		214		36		-		(444)
Ending Balance - June 30, 2024	$	6,017	$	227	$	525	$	5,438	$	39	$	-	$	12,246
Allowance for credit losses
Three Months Ending June 30, 2023
Beginning Balance - March 31, 2023	$	5,605	$	277	$	1,117	$	5,482	$	32	$	124	$	12,637
Charge-offs		-		-		-		-		-		-		-
Recoveries		-		-		-		1		-		-		1
Provisions (credits) on loans		336		40		(144)		(184)		(9)		71		110
Ending Balance - June 30, 2023	$	5,941	$	317	$	973	$	5,299	$	23	$	195	$	12,748
Six Months Ending June 30, 2023
Beginning Balance - December 31, 2022	$	5,113	$	200	$	1,289	$	4,960	$	13	$	874	$	12,449
January 1, 2023 adoption of ASU 2016-13		492		77		(172)		522		19		(750)		188
Charge-offs		-		-		-		-		-		-		-
Recoveries		-		-		-		1		-		-		1
Provisions (credits) on loans		336		40		(144)		(184)		(9)		71		110
Ending Balance - June 30, 2023	$	5,941	$	317	$	973	$	5,299	$	23	$	195	$	12,748

‎

The following tables represent the allocation for credit losses and the related loan portfolio disaggregated based on impairment methodology at June 30, 2024 and December 31, 2023:

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
	(In Thousands)
June 30, 2024
Allowance for Credit Losses
Ending Balance	$	6,017	$	227	$	525	$	5,438	$	39	$	-	$	12,246
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	-	$	20	$	-	$	83	$	-	$	-	$	103
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-	$	-	$	21
Ending balance: collectively evaluated for impairment	$	6,017	$	207	$	504	$	5,355	$	39	$	-	$	12,122
Loans receivables:
Ending balance	$	535,850	$	19,230	$	38,788	$	667,769	$	495			$	1,262,132
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	1,227	$	294	$	-	$	1,655	$	-			$	3,176
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-			$	21
Ending balance: collectively evaluated for impairment	$	534,623	$	18,936	$	38,767	$	666,114	$	495			$	1,258,935
December 31, 2023
Allowance for Credit Losses
Ending Balance	$	6,108	$	195	$	920	$	5,224	$	14	$	-	$	12,461
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	-	$	22	$	-	$	152	$	-	$	-	$	174
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-	$	-	$	21
Ending balance: collectively evaluated for impairment	$	6,108	$	173	$	899	$	5,072	$	14	$	-	$	12,266
Loans receivables:
Ending balance	$	539,034	$	16,840	$	33,951	$	663,127	$	565			$	1,253,517
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	1,303	$	296	$	-	$	1,718	$	-			$	3,317
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-			$	21
Ending balance: collectively evaluated for impairment	$	537,731	$	16,544	$	33,930	$	661,409	$	565			$	1,250,179

‎

Based on the guidance in ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, a loan modification or refinancing results in a new loan if the terms of the new loan are at least as favorable to the lender as the terms with customers with similar collection risks that are not refinancing or restricting their loans and the modification to the terms of the loan are more than minor. If a loan modification or refinancing does not result in a new loan, it is classified as a loan modification.

There are additional disclosures for modification of loans with borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows. The disclosures are applicable to situations where there is principal forgiveness, interest rate reductions, other than insignificant payment delays, term extensions, or a combination of any of these items. If the Company modifies any loans to borrowers in financial distress that involves principal forgiveness, the amount of principal that is forgiven is charged off against the allowance for credit losses. The Company had no new loan modifications to borrowers experiencing financial difficulties in the six months ending June 30, 2023, and there were no modifications to borrowers experiencing financial difficulties that were outstanding at June 30, 2023.

The following table presents new loan modifications for credit concerns during the six months ending June 30, 2024:

	Number of Loans	Pre-Modification Outstanding Balance		Post- Modification Outstanding Balance
	(Dollars In Thousands)
Six Months Ending June 30, 2024
Residential real estate	1	$	79	$	79
	1	$	79	$	79

The loan modification listed above had no reserve recorded in the allowance for credit losses at June 30, 2024. The above loan was not past due at June 30, 2024. The borrower was experiencing financial distress. The modified home equity loan had an extended maturity date compared to the original loan. The above loan represents less than 0.01% of the total residential real estate loans outstanding at June 30, 2024. There is no commitment to lend additional amounts on this modified loan. The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. There were $139 thousand of modifications to borrowers experiencing financial difficulties that were outstanding at June 30, 2024.

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Deposits

6 Months Ended

Jun. 30, 2024

Deposits [Abstract]

Deposits

Note 6 – Deposits

The components of deposits at June 30, 2024 and December 31, 2023 are as follows:

	June 30, 2024		December 31, 2023
	(In Thousands)
Demand, non-interest bearing	$	351,810	$	328,669
Demand, NOW and money market, interest bearing		304,417		252,400
Savings		461,383		493,129
Time, $250 and over		155,724		138,765
Time, other		294,266		263,270
Total deposits	$	1,567,600	$	1,476,233

‎

At June 30, 2024, the scheduled maturities of time deposits are as follows (in thousands):

2024 (remainder of the year)	$	283,844
2025		138,819
2026		24,475
2027		1,432
2028		1,341
2029		79
	$	449,990

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Short-Term and Long-Term Borrowings

6 Months Ended

Jun. 30, 2024

Short-Term and Long-Term Borrowings [Abstract]

Short-Term and Long-Term Borrowings

Note 7 – 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 June 30, 2024, the Bank had a maximum borrowing capacity for short-term and long-term FHLB advances of approximately $804.9 million, of which $804.8 million is available for borrowing at June 30, 2024 due to an outstanding letter of credit in the amount of $160 thousand. This borrowing capacity with the FHLB includes a line of credit of $150.0 million. There were no short-term or long-term FHLB advances outstanding as of June 30, 2024. There were $35.0 million short-term FHLB advances outstanding and no long-term FHLB advances outstanding as of December 31, 2023. 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 June 30, 2024 and December 31, 2023. Advances from this line are unsecured.

The Bank is also eligible to borrow under the Federal Reserve Bank’s discount window borrowing programs.

The Company has a revolving line of credit facility with the ACBB of $7.5 million, of which none was outstanding at June 30, 2024 and December 31, 2023. Advances from this line are unsecured. Under the terms of this renewed facility, availability under the revolving line of credit would be reduced to $5.0 million should the Company’s net tangible equity ratio drop below 5% and availability would be reduced to $2.0 million should the Company’s net tangible equity ratio drop below 2%. If the Company’s net tangible equity ratio drops below 0%, the commitment is canceled.

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Stock Incentive Plan and Employee Stock Purchase Plan

6 Months Ended

Jun. 30, 2024

Stock Incentive Plan and Employee Stock Purchase Plan [Abstract]

Stock Incentive Plan and Employee Stock Purchase Plan

Note 8 – 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 June 30, 2024, there were 375,155 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 two 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 June 30, 2024, there have been 264,958 awards granted. There were no awards granted during the three months ended June 30, 2024 and 2023. During the six months ended June 30, 2024 and 2023 there were 18,843 and 13,877 awards granted, respectively. During the three and six months ended June 30, 2024, the Company recognized compensation expense for restricted stock awards of $66 thousand and $400 thousand, respectively. During the three and six months ended June 30, 2023, the Company recognized compensation expense for restricted stock awards of $76 thousand and $415 thousand, 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 and six months ended June 30, 2024 and 2023. At June 30, 2024 there were no outstanding options.

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 is 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 29,094 shares have been issued as of June 30, 2024. The Company recognized discount expense in relation to the ESPP of $1 thousand and $2 thousand for the three and six months ended June 30, 2024 and June 30, 2023, respectively.

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Other Comprehensive (Loss) Income

6 Months Ended

Jun. 30, 2024

Other Comprehensive (Loss) Income [Abstract]

Other Comprehensive (Loss) Income

Note 9 – 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 (loss) income. Management believes that the unrealized losses on securities available for sale are primarily a result of the increasing market interest rates and the overall current market conditions.

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

	Three Months Ended June 30,
	2024						2023
	(In Thousands)
	Before		Tax		Net of		Before		Tax		Net of
	Tax		Effect		Tax		Tax		Effect		Tax
Change in accumulated other comprehensive loss:
Unrealized holding losses on securities ‎   available for sale	$	(685)	$	144	$	(541)	$	(881)	$	185	$	(696)
Reclassification adjustments for gains on securities ‎   transactions included in net income (A),(B)		-		-		-		-		-		-
Total other comprehensive loss	$	(685)	$	144	$	(541)	$	(881)	$	185	$	(696)

	Six Months Ended June 30,
	2024						2023
	(In Thousands)
	Before		Tax		Net of		Before		Tax		Net of
	Tax		Effect		Tax		Tax		Effect		Tax
Change in accumulated other comprehensive loss:
Unrealized holding (losses) gains on securities ‎   available for sale	$	(6,708)	$	1,409	$	(5,299)	$	3,367	$	(707)	$	2,660
Reclassification adjustments for gains on securities ‎   transactions included in net income (A),(B)		-		-		-		-		-		-
Total other comprehensive (loss) income	$	(6,708)	$	1,409	$	(5,299)	$	3,367	$	(707)	$	2,660

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

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

There were no realized gains on securities available for sale for the three and six months ended June 30, 2024 and 2023.

‎

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

	Securities
	Available
	for Sale
Three Months Ended June 30, 2024 and 2023	(In Thousands)
Balance March 31, 2024	$	(48,458)
Other comprehensive loss before reclassifications		(541)
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive loss during the period		(541)
Balance June 30, 2024	$	(48,999)
Balance March 31, 2023	$	(47,751)
Other comprehensive loss before reclassifications		(696)
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive loss during the period		(696)
Balance June 30, 2023	$	(48,447)
Six Months Ended June 30, 2024 and 2023
Balance January 1, 2024	$	(43,700)
Other comprehensive loss before reclassifications		(5,299)
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive loss during the period		(5,299)
Balance June 30, 2024	$	(48,999)
Balance January 1, 2023	$	(51,107)
Other comprehensive income before reclassifications		2,660
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive income during the period		2,660
Balance June 30, 2023	$	(48,447)

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Basic and Diluted Earnings per Share

6 Months Ended

Jun. 30, 2024

Basic and Diluted Earnings per Share [Abstract]

Basic and Diluted Earnings Per Share

‎

Note 10 – 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				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(Dollars In Thousands, Except Share and Per Share Data)
Net income	$	2,492	$	3,047	$	5,028	$	6,834
Weighted average shares outstanding		7,616,511		7,601,822		7,609,591		7,596,829
Dilutive effect of potential common shares, stock options		-		-		-		-
Diluted weighted average common shares outstanding		7,616,511		7,601,822		7,609,591		7,596,829
Basic earnings per share	$	0.33	$	0.40	$	0.66	$	0.90
Diluted earnings per share	$	0.33	$	0.40	$	0.66	$	0.90

There were no stock options not considered in computing diluted earnings per common share for the three and six months ended June 30, 2024 and June 30, 2023.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2024

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 11 – 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 June 30, 2024 and December 31, 2023, 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. Treasury securities	$	-	$	12,238	$	-	$	12,238
U.S. Government agency obligations		-		2,369		-		2,369
Municipal bonds		-		58,714		-		58,714
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		436		-		436
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		185,055		-		185,055
June 30, 2024 Securities available for sale	$	-	$	258,812	$	-	$	258,812
U.S. Treasury securities	$	-	$	14,590	$	-	$	14,590
U.S. Government agency obligations		-		2,339		-		2,339
Municipal bonds		-		60,796		-		60,796
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		442		-		442
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		197,893		-		197,893
December 31, 2023 Securities available for sale	$	-	$	276,060	$	-	$	276,060

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 June 30, 2024 and December 31, 2023, 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)
June 30, 2024 Loans Individually evaluated for credit losses	$	-	$	-	$	567	$	567
December 31, 2023 Loans Individually evaluated for credit losses	$	-	$	-	$	583	$	583

Loans individually evaluated for credit losses are those that are accounted for under existing Financial Accounting Standards Board (“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 June 30, 2024, of the loans individually evaluated for credit losses having an aggregate balance of $3.2 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 $691 thousand in loans individually evaluated for credit losses, an aggregate valuation allowance of $124 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 June 30, 2024 and December 31, 2023, 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)
June 30, 2024:
Loans Individually evaluated for credit losses	$	567	Appraisal of real estate collateral	Appraisal adjustments (1)	0% to -25% (-25.0%)
			and pending agreement of sale	Liquidation expenses (2)	0% to -7.5% (-7.5%)
December 31, 2023:
Loans Individually evaluated for credit losses	$	583	Appraisal of real estate collateral	Appraisal adjustments (1)	0% to -25% (-24.8%)
			and pending agreement of sale	Liquidation expenses (2)	0% to -10.0% (-7.5%)

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 June 30, 2024 and December 31, 2023:

						(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)
June 30, 2024:
Financial assets:
Cash and cash equivalents	$	135,886	$	135,886	$	135,886	$	-	$	-
Securities available-for-sale		258,812		258,812		-		258,812		-
Loans receivable, net of allowance		1,250,478		1,135,668		-		-		1,135,668
Restricted investments in bank stock		1,038		1,038		-		1,038		-
Accrued interest receivable		3,413		3,413		-		3,413		-
Financial liabilities:
Deposits		1,567,600		1,563,128		-		1,563,128		-
Securities sold under agreements to
repurchase and federal funds purchased		19,577		19,577		-		19,577		-
Accrued interest payable		7,783		7,783		-		7,783		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-
December 31, 2023:
Financial assets:
Cash and cash equivalents	$	78,923	$	78,923	$	78,923	$	-	$	-
Securities available-for-sale		276,060		276,060		-		276,060		-
Loans receivable, net of allowance		1,241,578		1,150,233		-		-		1,150,233
Restricted investments in bank stock		2,458		2,458		-		2,458		-
Accrued interest receivable		3,298		3,298		-		3,298		-
Financial liabilities:
Deposits		1,476,233		1,472,497		-		1,472,497		-
Securities sold under agreements to
repurchase and federal funds purchased		15,237		15,237		-		15,237		-
Short-term borrowings		35,000		35,000		-		35,000		-
Accrued interest payable		7,844		7,844		-		7,844		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-

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Basis of Presentation (Policy)

6 Months Ended

Jun. 30, 2024

Basis of Presentation [Abstract]

Principles of Consolidation and Nature of Operations

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 and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

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, 2023, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 28, 2024.

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 2023 consolidated financial statements may have been reclassified to conform to 2024 presentation. These reclassifications had no effect on 2023 net income.

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Securities Available for Sale (Tables)

6 Months Ended

Jun. 30, 2024

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)
June 30, 2024:
U.S. Treasury securities	$	12,439	$	-	$	(201)	$	12,238
U.S. Government agency obligations		2,474		-		(105)		2,369
Municipal bonds		72,713		19		(14,018)		58,714
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		509		-		(73)		436
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		232,701		-		(47,646)		185,055
Total	$	320,836	$	19	$	(62,043)	$	258,812
December 31, 2023:
U.S. Treasury securities	$	14,867	$	-	$	(277)	$	14,590
U.S. Government agency obligations		2,463		-		(124)		2,339
Municipal bonds		73,128		73		(12,405)		60,796
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - commercial		509		-		(67)		442
U.S. Government Sponsored Enterprise (GSE) - ‎   Mortgage-backed securities - residential		240,409		2		(42,518)		197,893
Total	$	331,376	$	75	$	(55,391)	$	276,060

Securities Available For Sale by Contractual Maturity

		Amortized		Fair
		Cost		Value
	(In Thousands)
Due in one year or less	$	9,938	$	9,804
Due after one year through five years		7,323		7,010
Due after five years through ten years		6,875		6,467
Due after ten years		63,490		50,040
		87,626		73,321
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - commercial		509		436
U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities - residential		232,701		185,055
Total	$	320,836	$	258,812

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
June 30, 2024:	(In Thousands)
U.S. Treasury securities	$	-	$	-	$	12,238	$	(201)	$	12,238	$	(201)
U.S. Government agency obligations		-		-		2,369		(105)		2,369		(105)
Municipal bonds		12,000		(1,014)		45,615		(13,004)		57,615		(14,018)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
commercial		-		-		436		(73)		436		(73)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
residential		23		-		184,980		(47,646)		185,003		(47,646)
Total Temporarily Impaired Securities	$	12,023	$	(1,014)	$	245,638	$	(61,029)	$	257,661	$	(62,043)
		.
December 31, 2023:
U.S. Treasury securities	$	-	$	-	$	14,590	$	(277)	$	14,590	$	(277)
U.S. Government agency obligations		-		-		2,339		(124)		2,339		(124)
Municipal bonds		5,561		(201)		52,267		(12,204)		57,828		(12,405)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
commercial		-		-		442		(67)		442		(67)
U.S. Government Sponsored Enterprise
(GSE) - Mortgage -backed securities -
residential		-		-		197,796		(42,518)		197,796		(42,518)
Total Temporarily Impaired Securities	$	5,561	$	(201)	$	267,434	$	(55,190)	$	272,995	$	(55,391)

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Loans and Credit Quality (Tables)

6 Months Ended

Jun. 30, 2024

Loans and Credit Quality [Abstract]

Composition of Loans Receivable

	June 30, 2024			December 31, 2023
			Percentage of			Percentage of
	Balance		total Loans	Balance		total Loans
		(Dollars in Thousands)
Commercial real estate	$	535,850	42.46%	$	539,034	43.00%
Commercial construction		19,230	1.52%		16,840	1.34%
Commercial		38,788	3.07%		33,951	2.71%
Residential real estate		667,769	52.91%		663,127	52.90%
Consumer		495	0.04%		565	0.05%
Total loans		1,262,132	100.00%		1,253,517	100.00%
Unearned origination fees		592			522
Allowance for credit losses		(12,246)			(12,461)
Net Loans	$	1,250,478		$	1,241,578

Schedule of Loan Portfolio by Origination Year

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention (potential weakness), substandard (well defined weakness) and doubtful (full collection unlikely) within the Company's internal risk rating system as of June 30, 2024 by year of origination:

		2024		2023		2022		2021		2020		Prior		Revolving		Total
June 30, 2024		(In Thousands)
Commercial
real estate
	Pass	$	26,187	$	61,255	$	149,545	$	51,128	$	61,118	$	176,099	$	9,291	$	534,623
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		1,227		-		1,227
	Total		26,187		61,255		149,545		51,128		61,118		177,326		9,291		535,850
Commercial
construction
	Pass		1,934		3,215		8,591		5,167		-		29		-		18,936
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		239		55		294
	Total		1,934		3,215		8,591		5,167		-		268		55		19,230
Commercial
	Pass		4,992		2,073		4,272		1,872		3,006		13,941		8,611		38,767
	Special Mention		-		-		-		-		-		21		-		21
	Substandard		-		-		-		-		-		-		-		-
	Total		4,992		2,073		4,272		1,872		3,006		13,962		8,611		38,788
Residential
real estate
	Pass		38,140		69,892		91,967		152,093		135,106		156,511		22,553		666,262
	Special Mention		-		-		-		-		-		432		-		432
	Substandard		-		-		44		-		-		1,031		-		1,075
	Total		38,140		69,892		92,011		152,093		135,106		157,974		22,553		667,769
Consumer
	Pass		75		81		93		16		-		9		221		495
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		-		-		-
	Total		75		81		93		16		-		9		221		495
Total
Loans Receivable		$	71,328	$	136,516	$	254,512	$	210,276	$	199,230	$	349,539	$	40,731	$	1,262,132

The Company had gross charge-offs of $11 thousand during the six months ending June 30, 2024. One (1) charge-off of $5 thousand was a consumer loan originated in 2021 and one (1) charge-off of $6 thousand was a consumer loan originated in 2023.

‎

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention (potential weakness), substandard (well defined weakness) and doubtful (full collection unlikely) within the Company's internal risk rating system as of December 31, 2023 by year of origination:

		2023		2022		2021		2020		2019		Prior		Revolving		Total
December 31, 2023		(In Thousands)
Commercial
real estate
	Pass	$	62,467	$	160,257	$	58,094	$	64,146	$	26,835	$	157,888	$	8,094	$	537,781
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		1,253		-		1,253
	Total		62,467		160,257		58,094		64,146		26,835		159,141		8,094		539,034
Commercial
construction
	Pass		2,071		8,591		5,412		-		440		30		-		16,544
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		241		55		296
	Total		2,071		8,591		5,412		-		440		271		55		16,840
Commercial
	Pass		2,236		4,851		2,260		3,312		5,388		9,311		6,572		33,930
	Special Mention		-		-		-		-		21		-		-		21
	Substandard		-		-		-		-		-		-		-		-
	Total		2,236		4,851		2,260		3,312		5,409		9,311		6,572		33,951
Residential
real estate
	Pass		75,372		96,032		158,135		142,318		46,035		122,252		21,423		661,567
	Special Mention		-		-		-		-		-		443		-		443
	Substandard		-		-		-		-		173		944		-		1,117
	Total		75,372		96,032		158,135		142,318		46,208		123,639		21,423		663,127
Consumer
	Pass		130		118		22		1		13		11		270		565
	Special Mention		-		-		-		-		-		-		-		-
	Substandard		-		-		-		-		-		-		-		-
	Total		130		118		22		1		13		11		270		565
Total
Loans Receivable		$	142,276	$	269,849	$	223,923	$	209,777	$	78,905	$	292,373	$	36,414	$	1,253,517

The Company had no loans that were charged off during the year ended December 31, 2023 and therefore no gross charge-off information is presented in the above table.

Schedule of Impaired Loans

‎

The following table presents the carrying value and related allowance for credit losses of individually analyzed loans at June 30, 2024 and December 31, 2023, respectively:

	June 30, 2024						December 31, 2023
	Recorded Investment		Unpaid Principal Balance		Related Allowance for Credit Losses		Recorded Investment		Unpaid Principal Balance		Related Allowance for Credit Losses
	(In Thousands)
With no related allowance recorded:
Commercial real estate (1)	$	1,227	$	1,227			$	1,303	$	1,543
Commercial construction (1)		55		55				55		55
Commercial		-		-				-		-
Residential real estate (1)		1,224		1,227				1,202		1,206
Consumer		-		-				-		-
With an allowance recorded:
Commercial real estate	$	-	$	-	$	-	$	-	$	-	$	-
Commercial construction (1)		239		239		20		241		241		22
Commercial (2)		21		21		21		21		21		21
Residential real estate (1)		431		431		83		516		516		152
Consumer		-		-		-		-		-		-
Total:
Commercial real estate	$	1,227	$	1,227	$	-	$	1,303	$	1,543	$	-
Commercial construction		294		294		20		296		296		22
Commercial		21		21		21		21		21		21
Residential real estate		1,655		1,658		83		1,718		1,722		152
Consumer		-		-		-		-		-		-
	$	3,197	$	3,200	$	124	$	3,338	$	3,582	$	195

1.All loans are real estate collateral dependent.

2.All loans are non-collateral dependent loans.

Schedule of Nonaccrual Loans

	June 30, 2024		December 31, 2023
	(In Thousands)
Commercial real estate	$	-	$	-
Commercial construction		-		-
Commercial		-		-
Residential real estate		292		366
Consumer		-		-
Total	$	292	$	366

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
June 30, 2024	(In Thousands)
Commercial real estate	$	742	$	-	$	-	$	742	$	535,108	$	535,850	$	-
Commercial construction		-		-		-		-		19,230		19,230		-
Commercial		-		-		-		-		38,788		38,788		-
Residential real estate		607		-		788		1,395		666,374		667,769		496
Consumer		1		-		-		1		494		495		-
Total	$	1,350	$	-	$	788	$	2,138	$	1,259,994	$	1,262,132	$	496
December 31, 2023
Commercial real estate	$	630	$	-	$	-	$	630	$	538,404	$	539,034	$	-
Commercial construction		-		-		-		-		16,840		16,840		-
Commercial		-		-		-		-		33,951		33,951		-
Residential real estate		344		-		193		537		662,590		663,127		-
Consumer		-		-		-		-		565		565		-
Total	$	974	$	-	$	193	$	1,167	$	1,252,350	$	1,253,517	$	-

Activity in Allowance for Loan Losses

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for credit losses	(In Thousands)
Three Months Ending June 30, 2024
Beginning Balance - March 31, 2024	$	6,216	$	237	$	553	$	5,508	$	29	$	-	$	12,543
Charge-offs		-		-		-		-		(11)		-		(11)
Recoveries		-		-		-		-		-		-		-
Provisions (credits) on loans		(199)		(10)		(28)		(70)		21		-		(286)
Ending Balance - June 30, 2024	$	6,017	$	227	$	525	$	5,438	$	39	$	-	$	12,246
Six Months Ending June 30, 2024
Beginning Balance - December 31, 2023	$	6,108	$	195	$	920	$	5,224	$	14	$	-	$	12,461
Charge-offs		-		-		-		-		(11)		-		(11)
Recoveries		240		-		-		-		-		-		240
Provisions (credits) on loans		(331)		32		(395)		214		36		-		(444)
Ending Balance - June 30, 2024	$	6,017	$	227	$	525	$	5,438	$	39	$	-	$	12,246
Allowance for credit losses
Three Months Ending June 30, 2023
Beginning Balance - March 31, 2023	$	5,605	$	277	$	1,117	$	5,482	$	32	$	124	$	12,637
Charge-offs		-		-		-		-		-		-		-
Recoveries		-		-		-		1		-		-		1
Provisions (credits) on loans		336		40		(144)		(184)		(9)		71		110
Ending Balance - June 30, 2023	$	5,941	$	317	$	973	$	5,299	$	23	$	195	$	12,748
Six Months Ending June 30, 2023
Beginning Balance - December 31, 2022	$	5,113	$	200	$	1,289	$	4,960	$	13	$	874	$	12,449
January 1, 2023 adoption of ASU 2016-13		492		77		(172)		522		19		(750)		188
Charge-offs		-		-		-		-		-		-		-
Recoveries		-		-		-		1		-		-		1
Provisions (credits) on loans		336		40		(144)		(184)		(9)		71		110
Ending Balance - June 30, 2023	$	5,941	$	317	$	973	$	5,299	$	23	$	195	$	12,748

Allocation of Allowance for Loan Losses and Related Loan Portfolio

	Commercial Real Estate		Commercial Construction		Commercial		Residential Real Estate		Consumer		Unallocated		Total
	(In Thousands)
June 30, 2024
Allowance for Credit Losses
Ending Balance	$	6,017	$	227	$	525	$	5,438	$	39	$	-	$	12,246
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	-	$	20	$	-	$	83	$	-	$	-	$	103
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-	$	-	$	21
Ending balance: collectively evaluated for impairment	$	6,017	$	207	$	504	$	5,355	$	39	$	-	$	12,122
Loans receivables:
Ending balance	$	535,850	$	19,230	$	38,788	$	667,769	$	495			$	1,262,132
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	1,227	$	294	$	-	$	1,655	$	-			$	3,176
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-			$	21
Ending balance: collectively evaluated for impairment	$	534,623	$	18,936	$	38,767	$	666,114	$	495			$	1,258,935
December 31, 2023
Allowance for Credit Losses
Ending Balance	$	6,108	$	195	$	920	$	5,224	$	14	$	-	$	12,461
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	-	$	22	$	-	$	152	$	-	$	-	$	174
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-	$	-	$	21
Ending balance: collectively evaluated for impairment	$	6,108	$	173	$	899	$	5,072	$	14	$	-	$	12,266
Loans receivables:
Ending balance	$	539,034	$	16,840	$	33,951	$	663,127	$	565			$	1,253,517
Ending balance: individually evaluated for impairment - real estate collateral dependent	$	1,303	$	296	$	-	$	1,718	$	-			$	3,317
Ending balance: individually evaluated for impairment - non-collateral dependent	$	-	$	-	$	21	$	-	$	-			$	21
Ending balance: collectively evaluated for impairment	$	537,731	$	16,544	$	33,930	$	661,409	$	565			$	1,250,179

Schedule of New Restructured Loans

	Number of Loans	Pre-Modification Outstanding Balance		Post- Modification Outstanding Balance
	(Dollars In Thousands)
Six Months Ending June 30, 2024
Residential real estate	1	$	79	$	79
	1	$	79	$	79

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Deposits (Tables)

6 Months Ended

Jun. 30, 2024

Deposits [Abstract]

Components of Deposits

	June 30, 2024		December 31, 2023
	(In Thousands)
Demand, non-interest bearing	$	351,810	$	328,669
Demand, NOW and money market, interest bearing		304,417		252,400
Savings		461,383		493,129
Time, $250 and over		155,724		138,765
Time, other		294,266		263,270
Total deposits	$	1,567,600	$	1,476,233

Scheduled Maturities of Time Deposits

2024 (remainder of the year)	$	283,844
2025		138,819
2026		24,475
2027		1,432
2028		1,341
2029		79
	$	449,990

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Other Comprehensive (Loss) Income (Tables)

6 Months Ended

Jun. 30, 2024

Other Comprehensive (Loss) Income [Abstract]

Components of Other Comprehensive (Loss) Income, both Before Tax and Net of Tax

	Three Months Ended June 30,
	2024						2023
	(In Thousands)
	Before		Tax		Net of		Before		Tax		Net of
	Tax		Effect		Tax		Tax		Effect		Tax
Change in accumulated other comprehensive loss:
Unrealized holding losses on securities ‎   available for sale	$	(685)	$	144	$	(541)	$	(881)	$	185	$	(696)
Reclassification adjustments for gains on securities ‎   transactions included in net income (A),(B)		-		-		-		-		-		-
Total other comprehensive loss	$	(685)	$	144	$	(541)	$	(881)	$	185	$	(696)

	Six Months Ended June 30,
	2024						2023
	(In Thousands)
	Before		Tax		Net of		Before		Tax		Net of
	Tax		Effect		Tax		Tax		Effect		Tax
Change in accumulated other comprehensive loss:
Unrealized holding (losses) gains on securities ‎   available for sale	$	(6,708)	$	1,409	$	(5,299)	$	3,367	$	(707)	$	2,660
Reclassification adjustments for gains on securities ‎   transactions included in net income (A),(B)		-		-		-		-		-		-
Total other comprehensive (loss) income	$	(6,708)	$	1,409	$	(5,299)	$	3,367	$	(707)	$	2,660

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

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

Summary of Accumulated Other Comprehensive Loss, Net of Tax

	Securities
	Available
	for Sale
Three Months Ended June 30, 2024 and 2023	(In Thousands)
Balance March 31, 2024	$	(48,458)
Other comprehensive loss before reclassifications		(541)
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive loss during the period		(541)
Balance June 30, 2024	$	(48,999)
Balance March 31, 2023	$	(47,751)
Other comprehensive loss before reclassifications		(696)
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive loss during the period		(696)
Balance June 30, 2023	$	(48,447)
Six Months Ended June 30, 2024 and 2023
Balance January 1, 2024	$	(43,700)
Other comprehensive loss before reclassifications		(5,299)
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive loss during the period		(5,299)
Balance June 30, 2024	$	(48,999)
Balance January 1, 2023	$	(51,107)
Other comprehensive income before reclassifications		2,660
Amounts reclassified from accumulated other ‎   comprehensive loss		-
Net other comprehensive income during the period		2,660
Balance June 30, 2023	$	(48,447)

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Basic and Diluted Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2024

Basic and Diluted Earnings per Share [Abstract]

Earnings per Share

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(Dollars In Thousands, Except Share and Per Share Data)
Net income	$	2,492	$	3,047	$	5,028	$	6,834
Weighted average shares outstanding		7,616,511		7,601,822		7,609,591		7,596,829
Dilutive effect of potential common shares, stock options		-		-		-		-
Diluted weighted average common shares outstanding		7,616,511		7,601,822		7,609,591		7,596,829
Basic earnings per share	$	0.33	$	0.40	$	0.66	$	0.90
Diluted earnings per share	$	0.33	$	0.40	$	0.66	$	0.90

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

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. Treasury securities	$	-	$	12,238	$	-	$	12,238
U.S. Government agency obligations		-		2,369		-		2,369
Municipal bonds		-		58,714		-		58,714
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		436		-		436
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		185,055		-		185,055
June 30, 2024 Securities available for sale	$	-	$	258,812	$	-	$	258,812
U.S. Treasury securities	$	-	$	14,590	$	-	$	14,590
U.S. Government agency obligations		-		2,339		-		2,339
Municipal bonds		-		60,796		-		60,796
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - commercial		-		442		-		442
U.S. Government Sponsored Enterprise (GSE) -
Mortgage-backed securities - residential		-		197,893		-		197,893
December 31, 2023 Securities available for sale	$	-	$	276,060	$	-	$	276,060

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)
June 30, 2024 Loans Individually evaluated for credit losses	$	-	$	-	$	567	$	567
December 31, 2023 Loans Individually evaluated for credit losses	$	-	$	-	$	583	$	583

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)
June 30, 2024:
Loans Individually evaluated for credit losses	$	567	Appraisal of real estate collateral	Appraisal adjustments (1)	0% to -25% (-25.0%)
			and pending agreement of sale	Liquidation expenses (2)	0% to -7.5% (-7.5%)
December 31, 2023:
Loans Individually evaluated for credit losses	$	583	Appraisal of real estate collateral	Appraisal adjustments (1)	0% to -25% (-24.8%)
			and pending agreement of sale	Liquidation expenses (2)	0% to -10.0% (-7.5%)

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)
June 30, 2024:
Financial assets:
Cash and cash equivalents	$	135,886	$	135,886	$	135,886	$	-	$	-
Securities available-for-sale		258,812		258,812		-		258,812		-
Loans receivable, net of allowance		1,250,478		1,135,668		-		-		1,135,668
Restricted investments in bank stock		1,038		1,038		-		1,038		-
Accrued interest receivable		3,413		3,413		-		3,413		-
Financial liabilities:
Deposits		1,567,600		1,563,128		-		1,563,128		-
Securities sold under agreements to
repurchase and federal funds purchased		19,577		19,577		-		19,577		-
Accrued interest payable		7,783		7,783		-		7,783		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-
December 31, 2023:
Financial assets:
Cash and cash equivalents	$	78,923	$	78,923	$	78,923	$	-	$	-
Securities available-for-sale		276,060		276,060		-		276,060		-
Loans receivable, net of allowance		1,241,578		1,150,233		-		-		1,150,233
Restricted investments in bank stock		2,458		2,458		-		2,458		-
Accrued interest receivable		3,298		3,298		-		3,298		-
Financial liabilities:
Deposits		1,476,233		1,472,497		-		1,472,497		-
Securities sold under agreements to
repurchase and federal funds purchased		15,237		15,237		-		15,237		-
Short-term borrowings		35,000		35,000		-		35,000		-
Accrued interest payable		7,844		7,844		-		7,844		-
Off-balance sheet financial instruments:
Commitments to grant loans		-		-		-		-		-
Unfunded commitments under lines of credit		-		-		-		-		-
Standby letters of credit		-		-		-		-		-

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Securities Available for Sale (Narrative) (Details)	6 Months Ended
	Jun. 30, 2024 USD ($) security	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($) security
Securities Available for Sale [Abstract]
Securities pledged as collateral	$ 159,900,000		$ 145,700,000
Sale of securities	$ 0	$ 0
Securities in an unrealized loss position | security	196		189
Available for sale debt securities, allowance for credit loss	$ 0		$ 0

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Securities Available for Sale (Amortized Cost and Fair Values of Securities Available For Sale) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 320,836	$ 331,376
Gross Unrealized Gains	19	75
Gross Unrealized Losses	(62,043)	(55,391)
Fair Value	258,812	276,060
US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	12,439	14,867
Gross Unrealized Losses	(201)	(277)
Fair Value	12,238	14,590
U.S Government Agency Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,474	2,463
Gross Unrealized Losses	(105)	(124)
Fair Value	2,369	2,339
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	72,713	73,128
Gross Unrealized Gains	19	73
Gross Unrealized Losses	(14,018)	(12,405)
Fair Value	58,714	60,796
U.S. GSE - Mortgage-backed Securities [Member] | Commercial Real Estates [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	509	509
Gross Unrealized Losses	(73)	(67)
Fair Value	436	442
U.S. GSE - Mortgage-backed Securities [Member] | Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	232,701	240,409
Gross Unrealized Gains		2
Gross Unrealized Losses	(47,646)	(42,518)
Fair Value	$ 185,055	$ 197,893

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Securities Available for Sale (Securities Available For Sale by Contractual Maturity) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Due in one year or less	$ 9,938
Amortized Cost, Due after one year through five years	7,323
Amortized Cost, Due after five years through ten years	6,875
Amortized Cost, Due after ten years	63,490
Amortized Cost, Debt securities expected maturity	87,626
Amortized Cost, Debt Maturities, Total	320,836	$ 331,376
Fair Value, Due in one year or less	9,804
Fair Value, Due after one year through five years	7,010
Fair Value, Due after five years through ten years	6,467
Fair Value, Due after ten years	50,040
Fair Value, Debt securities expected maturity	73,321
Fair Value, Debt maturities, Total	258,812	276,060
U.S. GSE - Mortgage-backed Securities [Member] | Commercial Real Estates [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities	509
Amortized Cost, Debt Maturities, Total	509	509
Fair Value, U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities	436
Fair Value, Debt maturities, Total	436	442
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	232,701
Amortized Cost, Debt Maturities, Total	232,701	240,409
Fair Value, U.S. Government Sponsored Enterprise (GSE) - Mortgage-backed securities	185,055
Fair Value, Debt maturities, Total	$ 185,055	$ 197,893

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Securities Available for Sale (Investments Gross Unrealized Losses and Fair Value) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	$ 12,023	$ 5,561
Fair Value, 12 Months or More	245,638	267,434
Fair Value, Total	257,661	272,995
Unrealized Losses, Less Than 12 Months	(1,014)	(201)
Unrealized Losses, 12 Months or More	(61,029)	(55,190)
Unrealized Losses, Total	(62,043)	(55,391)
US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, 12 Months or More	12,238	14,590
Fair Value, Total	12,238	14,590
Unrealized Losses, 12 Months or More	(201)	(277)
Unrealized Losses, Total	(201)	(277)
U.S Government Agency Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, 12 Months or More	2,369	2,339
Fair Value, Total	2,369	2,339
Unrealized Losses, 12 Months or More	(105)	(124)
Unrealized Losses, Total	(105)	(124)
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	12,000	5,561
Fair Value, 12 Months or More	45,615	52,267
Fair Value, Total	57,615	57,828
Unrealized Losses, Less Than 12 Months	(1,014)	(201)
Unrealized Losses, 12 Months or More	(13,004)	(12,204)
Unrealized Losses, Total	(14,018)	(12,405)
Commercial Real Estates [Member] | U.S. GSE - Mortgage-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, 12 Months or More	436	442
Fair Value, Total	436	442
Unrealized Losses, 12 Months or More	(73)	(67)
Unrealized Losses, Total	(73)	(67)
Residential [Member] | U.S. GSE - Mortgage-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less Than 12 Months	23
Fair Value, 12 Months or More	184,980	197,796
Fair Value, Total	185,003	197,796
Unrealized Losses, 12 Months or More	(47,646)	(42,518)
Unrealized Losses, Total	$ (47,646)	$ (42,518)

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Restricted Investment in Bank Stock (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
FHLB or ACBB stock [Member]
Asset Impairment Charges	$ 0
Federal Home Loan Bank Of Pittsburgh [Member]
Investment stock at a carrying value	998,000,000	$ 2,400,000
Atlantic Community Bankers Bank (ACBB) [Member
Investment stock at a carrying value	$ 40,000	$ 40,000

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Loans and Credit Quality (Narrative) (Details)	3 Months Ended	6 Months Ended		12 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2024 USD ($) loan item	Jun. 30, 2023 USD ($) loan	Dec. 31, 2023 USD ($) loan item
Financing Receivable, Modifications [Line Items]
Charge-offs	$ (11,000)	$ (11,000)		$ 0
Number of loans collateralized by residential real estate in process of foreclosure | item		3		1
Number of loans experiencing payment default | loan			0
Modifications outstanding			$ 139,000
Number of contracts modified on loans outstanding | loan			0
Number of loans requiring impairment reserve | loan		0
Non-accrual loans	292,000	$ 292,000		$ 366,000
Number of loans in non-accrual status | loan		3		3
Non-accrual interest income	0	$ 1,000
Non-accrual, allowance				$ 66,000
Number of loans experiencing payment default | loan		139
Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Non-accrual loans	292,000	$ 292,000		366,000
Commitment to lend	0	$ 0
Residential Real Estate [Member] | Maximum [Member]
Financing Receivable, Modifications [Line Items]
Percentage of total loans outstanding		0.01%
Residential Real Estate [Member] | Substandard [Member]
Financing Receivable, Modifications [Line Items]
Real estate foreclosed assets	0	$ 0		0
Loans collateralized by residential real estate in process of foreclosure	739,000	739,000		$ 121,000
Consumer [Member]
Financing Receivable, Modifications [Line Items]
Charge-offs	$ (11,000)	(11,000)
2021, Gross charge-offs		5,000
2023, Gross charge-offs		$ 6,000
Number of loans | loan		1

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Loans and Credit Quality (Composition of Loans Receivable) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Dec. 31, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	100.00%		100.00%
Receivable, Gross	$ 1,262,132		$ 1,253,517
Unearned origination fees	592		522
Allowance for credit Losses	(12,246)	$ (12,543)	(12,461)	$ (12,748)	$ (12,637)	$ (12,449)
Net Loans	$ 1,250,478		$ 1,241,578
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	42.46%		43.00%
Receivable, Gross	$ 535,850		$ 539,034
Allowance for credit Losses	$ (6,017)	(6,216)	$ (6,108)	(5,941)	(5,605)	(5,113)
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	3.07%		2.71%
Receivable, Gross	$ 38,788		$ 33,951
Allowance for credit Losses	$ (525)	(553)	$ (920)	(973)	(1,117)	(1,289)
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	52.91%		52.90%
Receivable, Gross	$ 667,769		$ 663,127
Allowance for credit Losses	$ (5,438)	(5,508)	$ (5,224)	(5,299)	(5,482)	(4,960)
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	0.04%		0.05%
Receivable, Gross	$ 495		$ 565
Allowance for credit Losses	$ (39)	(29)	$ (14)	(23)	(32)	(13)
Construction [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total Loans	1.52%		1.34%
Receivable, Gross	$ 19,230		$ 16,840
Allowance for credit Losses	$ (227)	$ (237)	$ (195)	$ (317)	$ (277)	$ (200)

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Loans and Credit Quality (Schedule of Loan Portfolio by Origination Year) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	$ 71,328	$ 142,276
Total Loans, Fiscal Year Before Latest Fiscal Year	136,516	269,849
Total Loans, Two Years Before Latest Fiscal Year	254,512	223,923
Total Loans, Three Years Before Latest Fiscal Year	210,276	209,777
Total Loans, Four Years Before Latest Fiscal Year	199,230	78,905
Prior	349,539	292,373
Revolving	40,731	36,414
Total	1,262,132	1,253,517
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	26,187	62,467
Total Loans, Fiscal Year Before Latest Fiscal Year	61,255	160,257
Total Loans, Two Years Before Latest Fiscal Year	149,545	58,094
Total Loans, Three Years Before Latest Fiscal Year	51,128	64,146
Total Loans, Four Years Before Latest Fiscal Year	61,118	26,835
Prior	177,326	159,141
Revolving	9,291	8,094
Total	535,850	539,034
Commercial Real Estate [Member] | Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	26,187	62,467
Total Loans, Fiscal Year Before Latest Fiscal Year	61,255	160,257
Total Loans, Two Years Before Latest Fiscal Year	149,545	58,094
Total Loans, Three Years Before Latest Fiscal Year	51,128	64,146
Total Loans, Four Years Before Latest Fiscal Year	61,118	26,835
Prior	176,099	157,888
Revolving	9,291	8,094
Total	534,623	537,781
Commercial Real Estate [Member] | Substandard [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Prior	1,227	1,253
Total	1,227	1,253
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	4,992	2,236
Total Loans, Fiscal Year Before Latest Fiscal Year	2,073	4,851
Total Loans, Two Years Before Latest Fiscal Year	4,272	2,260
Total Loans, Three Years Before Latest Fiscal Year	1,872	3,312
Total Loans, Four Years Before Latest Fiscal Year	3,006	5,409
Prior	13,962	9,311
Revolving	8,611	6,572
Total	38,788	33,951
Commercial [Member] | Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	4,992	2,236
Total Loans, Fiscal Year Before Latest Fiscal Year	2,073	4,851
Total Loans, Two Years Before Latest Fiscal Year	4,272	2,260
Total Loans, Three Years Before Latest Fiscal Year	1,872	3,312
Total Loans, Four Years Before Latest Fiscal Year	3,006	5,388
Prior	13,941	9,311
Revolving	8,611	6,572
Total	38,767	33,930
Commercial [Member] | Special Mention [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Four Years Before Latest Fiscal Year		21
Prior	21
Total	21	21
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	38,140	75,372
Total Loans, Fiscal Year Before Latest Fiscal Year	69,892	96,032
Total Loans, Two Years Before Latest Fiscal Year	92,011	158,135
Total Loans, Three Years Before Latest Fiscal Year	152,093	142,318
Total Loans, Four Years Before Latest Fiscal Year	135,106	46,208
Prior	157,974	123,639
Revolving	22,553	21,423
Total	667,769	663,127
Residential Real Estate [Member] | Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	38,140	75,372
Total Loans, Fiscal Year Before Latest Fiscal Year	69,892	96,032
Total Loans, Two Years Before Latest Fiscal Year	91,967	158,135
Total Loans, Three Years Before Latest Fiscal Year	152,093	142,318
Total Loans, Four Years Before Latest Fiscal Year	135,106	46,035
Prior	156,511	122,252
Revolving	22,553	21,423
Total	666,262	661,567
Residential Real Estate [Member] | Special Mention [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Prior	432	443
Total	432	443
Residential Real Estate [Member] | Substandard [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Two Years Before Latest Fiscal Year	44
Total Loans, Four Years Before Latest Fiscal Year		173
Prior	1,031	944
Total	1,075	1,117
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	75	130
Total Loans, Fiscal Year Before Latest Fiscal Year	81	118
Total Loans, Two Years Before Latest Fiscal Year	93	22
Total Loans, Three Years Before Latest Fiscal Year	16	1
Total Loans, Four Years Before Latest Fiscal Year		13
Prior	9	11
Revolving	221	270
Total	495	565
Consumer [Member] | Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	75	130
Total Loans, Fiscal Year Before Latest Fiscal Year	81	118
Total Loans, Two Years Before Latest Fiscal Year	93	22
Total Loans, Three Years Before Latest Fiscal Year	16	1
Total Loans, Four Years Before Latest Fiscal Year		13
Prior	9	11
Revolving	221	270
Total	495	565
Construction [Member] | Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	1,934	2,071
Total Loans, Fiscal Year Before Latest Fiscal Year	3,215	8,591
Total Loans, Two Years Before Latest Fiscal Year	8,591	5,412
Total Loans, Three Years Before Latest Fiscal Year	5,167
Total Loans, Four Years Before Latest Fiscal Year		440
Prior	268	271
Revolving	55	55
Total	19,230	16,840
Construction [Member] | Commercial [Member] | Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans, Current Fiscal Year	1,934	2,071
Total Loans, Fiscal Year Before Latest Fiscal Year	3,215	8,591
Total Loans, Two Years Before Latest Fiscal Year	8,591	5,412
Total Loans, Three Years Before Latest Fiscal Year	5,167
Total Loans, Four Years Before Latest Fiscal Year		440
Prior	29	30
Total	18,936	16,544
Construction [Member] | Commercial [Member] | Substandard [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Prior	239	241
Revolving	55	55
Total	$ 294	$ 296

XML

Loans and Credit Quality (Schedule of Impaired Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	$ 2,500
Recorded Investment, With an allowance recorded	691
Total Recorded Investment	3,197	$ 3,338
Total Unpaid Principal Balance	3,200	3,582
Related Allowance For Credit Losses	124	195
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	1,227	1,303
Total Recorded Investment	1,227	1,303
Unpaid Principal Balance, With no related allowance recorded	1,227	1,543
Total Unpaid Principal Balance	1,227	1,543
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With an allowance recorded	21	21
Total Recorded Investment	21	21
Unpaid Principal Balance, With an allowance recorded	21	21
Total Unpaid Principal Balance	21	21
Related Allowance For Credit Losses	21	21
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	1,224	1,202
Recorded Investment, With an allowance recorded	431	516
Total Recorded Investment	1,655	1,718
Unpaid Principal Balance, With no related allowance recorded	1,227	1,206
Unpaid Principal Balance, With an allowance recorded	431	516
Total Unpaid Principal Balance	1,658	1,722
Related Allowance For Credit Losses	83	152
Construction [Member] | Commercial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	55	55
Recorded Investment, With an allowance recorded	239	241
Total Recorded Investment	294	296
Unpaid Principal Balance, With no related allowance recorded	55	55
Unpaid Principal Balance, With an allowance recorded	239	241
Total Unpaid Principal Balance	294	296
Related Allowance For Credit Losses	$ 20	$ 22

XML

Loans and Credit Quality (Schedule of Nonaccrual Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	$ 292	$ 366
Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	$ 292	$ 366

XML

Loans and Credit Quality (Schedule of Past Due Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	$ 1,262,132	$ 1,253,517
Loans Receivable > 90 Days and Accruing	496
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	1,350	974
Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	788	193
Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	2,138	1,167
Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	1,259,994	1,252,350
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	535,850	539,034
Commercial Real Estate [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	742	630
Commercial Real Estate [Member] | Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	742	630
Commercial Real Estate [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	535,108	538,404
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	38,788	33,951
Commercial [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	38,788	33,951
Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	667,769	663,127
Loans Receivable > 90 Days and Accruing	496
Residential Real Estate [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	607	344
Residential Real Estate [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	788	193
Residential Real Estate [Member] | Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	1,395	537
Residential Real Estate [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	666,374	662,590
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	495	565
Consumer [Member] | 30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	1
Consumer [Member] | Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	1
Consumer [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	494	565
Construction [Member] | Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	19,230	16,840
Construction [Member] | Commercial [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Receivable, Gross	$ 19,230	$ 16,840

XML

Loans and Credit Quality (Activity in Allowance for Loan Losses) (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	$ 12,543,000	$ 12,637,000	$ 12,461,000	$ 12,449,000	$ 12,449,000
Charge-offs	(11,000)		(11,000)		0
Recoveries		1,000	240,000	1,000
Provisions (credits) on loans	(286,000)	110,000	(444,000)	110,000
Ending balance	12,246,000	12,748,000	12,246,000	12,748,000	12,461,000
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	6,216,000	5,605,000	6,108,000	5,113,000	5,113,000
Recoveries			240,000
Provisions (credits) on loans	(199,000)	336,000	(331,000)	336,000
Ending balance	6,017,000	5,941,000	6,017,000	5,941,000	6,108,000
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	553,000	1,117,000	920,000	1,289,000	1,289,000
Provisions (credits) on loans	(28,000)	(144,000)	(395,000)	(144,000)
Ending balance	525,000	973,000	525,000	973,000	920,000
Commercial [Member] | Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	237,000	277,000	195,000	200,000	200,000
Provisions (credits) on loans	(10,000)	40,000	32,000	40,000
Ending balance	227,000	317,000	227,000	317,000	195,000
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	5,508,000	5,482,000	5,224,000	4,960,000	4,960,000
Recoveries		1,000		1,000
Provisions (credits) on loans	(70,000)	(184,000)	214,000	(184,000)
Ending balance	5,438,000	5,299,000	5,438,000	5,299,000	5,224,000
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	29,000	32,000	14,000	13,000	13,000
Charge-offs	(11,000)		(11,000)
Provisions (credits) on loans	21,000	(9,000)	36,000	(9,000)
Ending balance	$ 39,000	23,000	$ 39,000	23,000	14,000
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance		124,000		874,000	874,000
Provisions (credits) on loans		71,000		71,000
Ending balance		$ 195,000		195,000
Cumulative Effect from Change in Accounting Principle [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance				188,000	188,000
Cumulative Effect from Change in Accounting Principle [Member] | Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance				492,000	492,000
Cumulative Effect from Change in Accounting Principle [Member] | Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance				(172,000)	(172,000)
Cumulative Effect from Change in Accounting Principle [Member] | Commercial [Member] | Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance				77,000	77,000
Cumulative Effect from Change in Accounting Principle [Member] | Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance				522,000	522,000
Cumulative Effect from Change in Accounting Principle [Member] | Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance				19,000	19,000
Cumulative Effect from Change in Accounting Principle [Member] | Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance				$ (750,000)	$ (750,000)

XML

Loans and Credit Quality (Allocation of Allowance for Loan Losses and Related Loan Portfolio) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Dec. 31, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	$ 12,246	$ 12,543	$ 12,461	$ 12,748	$ 12,637	$ 12,449
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	12,122		12,266
Total Past Due	1,262,132		1,253,517
Loans receivable, Ending balance: collectively evaluated for impairment	1,258,935		1,250,179
Collateral Dependent [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending balance: individually evaluated for impairment	103		174
Loans receivable, Ending balance: individually evaluated for impairment	3,176		3,317
Non-Collateral Dependent [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending balance: individually evaluated for impairment	21		21
Loans receivable, Ending balance: individually evaluated for impairment	21		21
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	6,017	6,216	6,108	5,941	5,605	5,113
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	6,017		6,108
Total Past Due	535,850		539,034
Loans receivable, Ending balance: collectively evaluated for impairment	534,623		537,731
Commercial Real Estate [Member] | Collateral Dependent [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans receivable, Ending balance: individually evaluated for impairment	1,227		1,303
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	525	553	920	973	1,117	1,289
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	504		899
Total Past Due	38,788		33,951
Loans receivable, Ending balance: collectively evaluated for impairment	38,767		33,930
Commercial [Member] | Non-Collateral Dependent [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending balance: individually evaluated for impairment	21		21
Loans receivable, Ending balance: individually evaluated for impairment	21		21
Commercial [Member] | Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	227	237	195	317	277	200
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	207		173
Total Past Due	19,230		16,840
Loans receivable, Ending balance: collectively evaluated for impairment	18,936		16,544
Commercial [Member] | Construction [Member] | Collateral Dependent [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending balance: individually evaluated for impairment	20		22
Loans receivable, Ending balance: individually evaluated for impairment	294		296
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	5,438	5,508	5,224	5,299	5,482	4,960
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	5,355		5,072
Total Past Due	667,769		663,127
Loans receivable, Ending balance: collectively evaluated for impairment	666,114		661,409
Residential Real Estate [Member] | Collateral Dependent [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending balance: individually evaluated for impairment	83		152
Loans receivable, Ending balance: individually evaluated for impairment	1,655		1,718
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance	39	$ 29	14	23	32	13
Allowance for Loan Losses, Ending balance: collectively evaluated for impairment	39		14
Total Past Due	495		565
Loans receivable, Ending balance: collectively evaluated for impairment	$ 495		$ 565
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Ending Balance				$ 195	$ 124	$ 874

XML

Loans Receivable and Credit Quality (Schedule of New Restructured Loans) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($) loan
Financing Receivable, Modifications [Line Items]
Number of Loans | loan	1
Pre-Modification Outstanding Balance	$ 79
Post-Modification Outstanding Balance	$ 79
Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Loans | loan	1
Pre-Modification Outstanding Balance	$ 79
Post-Modification Outstanding Balance	$ 79

XML

Deposits (Components of Deposits) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Deposits [Abstract]
Demand, non-interest bearing	$ 351,810	$ 328,669
Demand, NOW and money market, interest bearing	304,417	252,400
Savings	461,383	493,129
Time, $250 and over	155,724	138,765
Time, other	294,266	263,270
Total Deposits	$ 1,567,600	$ 1,476,233

XML

Deposits (Scheduled Maturities of Time Deposits) (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Deposits [Abstract]
2024 (remainder of the year)	$ 283,844
2025	138,819
2026	24,475
2027	1,432
2028	1,341
2029	79
Total time deposits	$ 449,990

XML

Short-term and Long-term Borrowings (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Line of Credit Facility [Line Items]
Long-term advances FHLB	$ 0	$ 0
Federal Home Loan Bank Advances Short and Long Term [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	804,900,000
Available borrowing capacity	804,800,000
Line of credit, maximum borrowing capacity	150,000,000.0
Short-term advances with FHLB outstanding		35,000,000.0
Letters of Credit Outstanding	$ 160,000
Maximum [Member]
Line of Credit Facility [Line Items]
Federal Home Loan Bank advance period	60 months
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
Atlantic Community Bankers Bank (ACBB) [Member | Revolving Line of Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity	7,500,000	7,500,000
Line of credit outstanding	0	$ 0
Atlantic Community Bankers Bank (ACBB) [Member | Revolving Line of Credit Facility [Member] | Net Tangible Ratio below 5% [Member]
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity	$ 5,000,000.0
Net tangible ratio threshold, percentage	5.00%
Atlantic Community Bankers Bank (ACBB) [Member | Revolving Line of Credit Facility [Member] | Net Tangible Ratio below 2% [Member]
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity	$ 2,000,000.0
Net tangible ratio threshold, percentage	2.00%
Atlantic Community Bankers Bank (ACBB) [Member | Revolving Line of Credit Facility [Member] | Net Tangible Ratio below 0% [Member]
Line of Credit Facility [Line Items]
Net tangible ratio threshold, percentage	0.00%

XML

Stock Incentive Plan and Employee Stock Purchase Plan (Narrative) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended		165 Months Ended
	Jun. 20, 2019	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Dec. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Shares, Issued		7,779,691		7,779,691		7,779,691	7,758,247
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted		0	0	0	0
Number of stock options outstanding		0		0		0
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted		0	0	18,843	13,877	264,958
Stock compensation expense		$ 66	$ 76	$ 400	$ 415
Minimum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period				2 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 expiration date				Jun. 20, 2029
Shares available for issuance		375,155		375,155		375,155
2010 Stock Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	10 years
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
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	$ 1	$ 2	$ 2
Common Stock, Shares, Issued		29,094		29,094		29,094

XML

Other Comprehensive (Loss) Income (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Other Comprehensive (Loss) Income [Abstract]
Realized gains on securities available for sale	$ 0	$ 0	$ 0	$ 0

XML

Other Comprehensive (Loss) Income (Components of Other Comprehensive (Loss) Income, both Before Tax and Net Of Tax) (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Other Comprehensive (Loss) Income [Abstract]
Unrealized holding gains (losses) on securities available for sale	$ (685)		$ (881)		$ (6,708)	$ 3,367
Unrealized holding gains (losses) on securities , Tax Effect	144		185		1,409	(707)
Unrealized holding gains (losses) on securities, Net of Tax	(541)		(696)		(5,299)	2,660
Reclassification adjustments for gains on securities transactions included in net income, Before Tax
Reclassification adjustments for gains on securities transactions included in net income: Tax Effect
Reclassification adjustments for gains on securities transactions included in net income: Net of Tax
Total other comprehensive income (loss), before tax	(685)		(881)		(6,708)	3,367
Total other comprehensive income (loss), Tax Effect	144		185		1,409	(707)
Other comprehensive (loss) income, net of tax	$ (541)	$ (4,758)	$ (696)	$ 3,356	$ (5,299)	$ 2,660

XML

Other Comprehensive (Loss) Income (Summary of Accumulated Other Comprehensive Loss, Net of Tax) (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Other Comprehensive (Loss) Income [Abstract]
Beginning Balance	$ (48,458)	$ (43,700)	$ (47,751)	$ (51,107)	$ (43,700)	$ (51,107)
Other comprehensive income before reclassifications	(541)		(696)		(5,299)	2,660
Other comprehensive (loss) income, net of tax	(541)	(4,758)	(696)	3,356	(5,299)	2,660
Ending Balance	$ (48,999)	$ (48,458)	$ (48,447)	$ (47,751)	$ (48,999)	$ (48,447)

XML

Basic and Diluted Earnings per Share (Narrative) (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Basic and Diluted Earnings per Share [Abstract]
Antidilutive securities excluded from computation of diluted earnings per share	0	0	0	0

XML

Basic and Diluted Earnings per Share (Earnings per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Basic and Diluted Earnings per Share [Abstract]
Net income	$ 2,492	$ 3,047	$ 5,028	$ 6,834
Weighted average shares outstanding	7,616,511	7,601,822	7,609,591	7,596,829
Diluted weighted average common shares	7,616,511	7,601,822	7,609,591	7,596,829
Basic earnings per share	$ 0.33	$ 0.40	$ 0.66	$ 0.90
Diluted earnings per share	$ 0.33	$ 0.40	$ 0.66	$ 0.90

XML

Fair Value Measurements (Narrative) (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Fair Value Measurements [Abstract]
Impaired loans aggregate balance	$ 3,197,000	$ 3,338,000
Impaired loans without related allowance	2,500,000
Impaired loans with related allowance	691,000
Related Allowance For Credit Losses	124,000	195,000
Real estate properties acquired through foreclosure	$ 0	$ 0

XML

Fair Value Measurements (Fair Value of Financial Assets Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Debt Securities	$ 258,812	$ 276,060
US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Debt Securities	12,238	14,590
U.S Government Agency Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Debt Securities	2,369	2,339
Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Debt Securities	58,714	60,796
U.S. GSE - Mortgage-backed Securities [Member] | Commercial Real Estates [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Debt Securities	436	442
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, Debt Securities	185,055	197,893
Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Debt Securities	258,812	276,060
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, Debt Securities	12,238	14,590
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, Debt Securities	2,369	2,339
Fair Value, Recurring [Member] | Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Debt Securities	58,714	60,796
Fair Value, Recurring [Member] | U.S. GSE - Mortgage-backed Securities [Member] | Commercial Real Estates [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Debt Securities	436	442
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, Debt Securities	185,055	197,893
(Level 2) Significant Other Observable Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Debt Securities	258,812	276,060
(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, Debt Securities	258,812	276,060
(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, Debt Securities	12,238	14,590
(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, Debt Securities	2,369	2,339
(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, Debt Securities	58,714	60,796
(Level 2) Significant Other Observable Inputs [Member] | Fair Value, Recurring [Member] | U.S. GSE - Mortgage-backed Securities [Member] | Commercial Real Estates [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Debt Securities	436	442
(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, Debt Securities	$ 185,055	$ 197,893

XML

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	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Estimate	$ 567	$ 583
(Level 3) Significant Unobservable Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Estimate	$ 567	$ 583

XML

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	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Appraisal Adjustment [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value	$ 567	$ 583
Appraisal Adjustment [Member] | Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(25.00%)	(25.00%)
Appraisal Adjustment [Member] | Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	0.00%	0.00%
Appraisal Adjustment [Member] | Weighted Average [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(25.00%)	(24.80%)
Liquidation Expenses [Member] | Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(7.50%)	(10.00%)
Liquidation Expenses [Member] | Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	0.00%	0.00%
Liquidation Expenses [Member] | Weighted Average [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(7.50%)	(7.50%)

XML

Fair Value Measurements (Estimated Fair Value of Financial Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	$ 258,812	$ 276,060
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	135,886	78,923
Securities available for sale	258,812	276,060
Loans receivable, net of allowance	1,250,478	1,241,578
Restricted investments in bank stock	1,038	2,458
Accrued interest receivable	3,413	3,298
Deposits	1,567,600	1,476,233
Securities sold under agreements to repurchase and federal funds purchased	19,577	15,237
Short-term borrowings		35,000
Accrued interest payable	7,783	7,844
Fair Value Estimate [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	135,886	78,923
Securities available for sale	258,812	276,060
Loans receivable, net of allowance	1,135,668	1,150,233
Restricted investments in bank stock	1,038	2,458
Accrued interest receivable	3,413	3,298
Deposits	1,563,128	1,472,497
Securities sold under agreements to repurchase and federal funds purchased	19,577	15,237
Short-term borrowings		35,000
Accrued interest payable	7,783	7,844
(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	135,886	78,923
(Level 2) Significant Other Observable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	258,812	276,060
Restricted investments in bank stock	1,038	2,458
Accrued interest receivable	3,413	3,298
Deposits	1,563,128	1,472,497
Securities sold under agreements to repurchase and federal funds purchased	19,577	15,237
Short-term borrowings		35,000
Accrued interest payable	7,783	7,844
(Level 3) Significant Unobservable Inputs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans receivable, net of allowance	$ 1,135,668	$ 1,150,233

XML

Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false