
	Beginning Balance		Charge-offs		Recoveries		(Recovery of) provision for credit losses		Ending Balance
Six months ended June 30, 2022
Commercial and industrial	$	3,480	$	(34)	$	91	$	(18)	$	3,519

1-4 Family	598		(24)		34		(34)		574
Hotels	2,426		—		—		82		2,508
Multi-family	483		—		—		(23)		460
Non Residential Non-Owner Occupied	2,319		—		44		(267)		2,096
Non Residential Owner Occupied	1,485		—		—		(90)		1,395
Commercial real estate	7,311		(24)		78		(332)		7,033

Residential real estate	5,716		(106)		49		(665)		4,994
Home equity	517		(19)		20		(180)		338
Consumer	106		(32)		47		(43)		78
DDA overdrafts	1,036		(1,235)		770		482		1,053
	$	18,166	$	(1,450)	$	1,055	$	(756)	$	17,015

Six months ended June 30, 2021
Commercial and industrial	$	3,644	$	(245)	$	71	$	(114)	$	3,356

1-4 Family	771		(35)		93		(132)		697
Hotels	3,347		(1,683)		—		(176)		1,488
Multi-family	674		—		—		(112)		562
Non Residential Non-Owner Occupied	3,223		(1)		37		(250)		3,009
Non Residential Owner Occupied	2,982		—		49		(420)		2,611
Commercial real estate	10,997		(1,719)		179		(1,090)		8,367

Residential real estate	8,093		(179)		91		(1,214)		6,791
Home equity	630		(72)		26		(116)		468
Consumer	163		(226)		143		165		245
DDA Overdrafts	1,022		(883)		721		(71)		789
	$	24,549	$	(3,324)	$	1,231	$	(2,440)	$	20,016


	Beginning Balance		Charge-offs		Recoveries		(Recovery of) provision for credit losses		Ending Balance
Three months ended June 30, 2022
Commercial and industrial	$	3,458	$	—	$	32	$	29	$	3,519

1-4 Family	574		(24)		5		19		574
Hotels	2,545		—		—		(37)		2,508
Multi-family	477		—		—		(17)		460
Non Residential Non-Owner Occupied	2,281		—		20		(205)		2,096
Non Residential Owner Occupied	1,382		—		—		13		1,395
Commercial real estate	7,259		(24)		25		(227)		7,033

Residential real estate	5,039		(56)		4		7		4,994
Home equity	410		(19)		3		(56)		338
Consumer	86		(9)		19		(18)		78
DDA overdrafts	1,028		(604)		364		265		1,053
	$	17,280	$	(712)	$	447	$	—	$	17,015

Three months ended June 30, 2021
Commercial and industrial	$	3,525	$	(211)	$	25	$	17	$	3,356

1-4 Family	749		(35)		9		(26)		697
Hotels	3,181		(1,683)		—		(10)		1,488
Multi-family	658		—		—		(96)		562
Non Residential Non-Owner Occupied	3,487		—		6		(484)		3,009
Non Residential Owner Occupied	2,792		—		—		(181)		2,611
Commercial real estate	10,867		(1,718)		15		(797)		8,367

Residential real estate	8,060		(86)		17		(1,200)		6,791
Home equity	608		(8)		3		(135)		468
Consumer	151		(79)		104		69		245
DDA Overdrafts	865		(430)		308		46		789
	$	24,076	$	(2,532)	$	472	$	(2,000)	$	20,016

Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant factors. The Company's estimate of future economic conditions utilized in its provision estimate is primarily dependent on expected unemployment ranges over a two-year period. Beyond two years, a straight line reversion to historical average loss rates is applied over the life of the loan pool in the migration methodology. The vintage methodology applies future average loss rates based on net losses in historical periods where the unemployment rate was within the forecasted range.

Interest income on loans is accrued and credited to operations based upon the principal amount outstanding, using methods that generally result in level rates of return. Loan origination fees, and certain direct costs, are deferred and amortized as an adjustment to the yield over the term of the loan. The accrual of interest generally is discontinued when a loan becomes 90 days past due as to principal or interest for all loan types. However, any loan may be placed on non-accrual status if the Company receives information that indicates a borrower is unable to meet the contractual terms of its respective loan

agreement. Other indicators considered for placing a loan on non-accrual status include the borrower’s involvement in bankruptcies, foreclosures, repossessions, litigation and any other situation resulting in doubt as to whether full collection of contractual principal and interest is attainable. When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and interest accrued in prior years is charged to the allowance for credit losses. Management may elect to continue the accrual of interest when the net realizable value of collateral exceeds the principal balance and related accrued interest, and the loan is in the process of collection.

Generally for all loan classes, interest income during the period the loan is non-performing is recorded on a cash basis after recovery of principal is reasonably assured. Cash payments received on nonperforming loans are typically applied directly against the outstanding principal balance until the loan is fully repaid. Generally, loans are restored to accrual status when the obligation is brought current, the borrower has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt.


	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	125	$	1,235	$	—

1-4 Family	—		1,453		—
Hotels	—		113		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		868		—
Non Residential Owner Occupied	—		349		—
Commercial Real Estate	—		2,783		—

Residential Real Estate	272		1,289		58
Home Equity	—		54		—
Consumer	—		—		—
Total	$	397	$	5,361	$	58


	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	—	$	996	$	43

1-4 Family	—		1,016		—
Hotels	—		113		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		652		—
Non Residential Owner Occupied	—		592		—
Commercial Real Estate	—		2,373		—

Residential Real Estate	63		2,746		—
Home Equity	—		40		—
Consumer	—		—		—
Total	$	63	$	6,155	$	43

Generally, all loan types are considered past due when the contractual terms of a loan are not met and the borrower is 30 days or more past due on a payment. Furthermore, residential and home equity loans are generally subject to charge-off when the loan becomes 120 days past due, depending on the estimated fair value of the collateral less cost to dispose, versus the outstanding loan balance. Commercial loans are generally charged off when the loan becomes 120 days past due. Open-end consumer loans are generally charged off when the loan becomes 180 days past due.


	June 30, 2022
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	130	$	—	$	—	$	130	$	358,990	$	1,361	$	360,481

1-4 Family	46		—		—		46		107,266		1,453		108,765
Hotels	—		—		—		—		337,797		113		337,910
Multi-family	—		—		—		—		203,856		—		203,856
Non Residential Non-Owner Occupied	—		—		—		—		550,372		868		551,240
Non Residential Owner Occupied	—		—		—		—		179,839		349		180,188
Commercial real estate	46		—		—		46		1,379,130		2,783		1,381,959

Residential real estate	4,666		574		58		5,298		1,644,146		1,561		1,651,005
Home Equity	247		35		—		282		125,406		54		125,742
Consumer	49		—		—		49		44,531		—		44,580
Overdrafts	426		5		—		431		2,560		—		2,991
Total	$	5,564	$	614	$	58	$	6,236	$	3,554,763	$	5,759	$	3,566,758


	December 31, 2021
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	116	$	177	$	43	$	336	$	344,852	$	996	$	346,184

1-4 Family	21		—		—		21		106,836		1,016		107,873
Hotels	—		—		—		—		311,202		113		311,315
Multi-family	—		—		—		—		215,677		—		215,677
Non Residential Non-Owner Occupied	—		—		—		—		639,166		652		639,818
Non Residential Owner Occupied	—		—		—		—		203,641		592		204,233
Commercial real estate	21		—		—		21		1,476,522		2,373		1,478,916

Residential real estate	5,166		156		—		5,322		1,540,834		2,809		1,548,965
Home Equity	592		26		—		618		121,687		40		122,345
Consumer	59		1		—		60		40,841		—		40,901
Overdrafts	485		4		—		489		6,014		—		6,503
Total	$	6,439	$	364	$	43	$	6,846	$	3,530,750	$	6,218	$	3,543,814

The Company’s policy on loan modifications typically does not allow for modifications that would be considered a concession from the Company. However, when there is a modification, the Company evaluates each modification to determine if the modification constitutes a troubled debt restructuring (“TDR”) in accordance with ASU 2011-02, whereby a modification of a loan would be considered a TDR when both of the following conditions are met: (1) a borrower is experiencing financial difficulty and (2) the modification constitutes a concession. These modifications range from partial deferrals (interest only) to full deferrals (principal and interest). When determining whether the borrower is experiencing financial difficulties, the

Company reviews whether the debtor is currently in payment default on any of its debt or whether it is probable that the debtor would be in payment default in the foreseeable future without the modification. Other indicators of financial difficulty include whether the debtor has declared or is in the process of declaring bankruptcy, the debtor’s ability to continue as a going concern, or the debtor’s projected cash flow to service its debt (including principal and interest) in accordance with the contractual terms for the foreseeable future, without a modification.


	Three Months Ended
	June 30, 2022					June 30, 2021
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Contracts	Investment		Investment		Contracts	Investment		Investment
Commercial and industrial	—	$	—	$	—	—	$	—	$	—

1-4 Family	—	—		—		—	—		—
Hotels	—	—		—		—	—		—
Multi-family	—	—		—		—	—		—
Non Owner Non-Owner Occupied	—	—		—		—	—		—
Non Owner Owner Occupied	—	—		—		—	—		—
Commercial real estate	—	—		—		—	—		—

Residential real estate	5	585		585		6	404		404
Home equity	1	30		30		—	—		—
Consumer	—	—		—		—	—		—
Total	6	$	615	$	615	6	$	404	$	404


	Six Months Ended
	June 30, 2022					June 30, 2021
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Contracts	Investment		Investment		Contracts	Investment		Investment
Commercial and industrial	—	$	—	$	—	—	$	—	$	—

1-4 Family	—	—		—		—	—		—
Hotels	—	—		—		—	—		—
Multi-family	—	—		—		—	—		—
Non Owner Non-Owner Occupied	—	—		—		—	—		—
Non Owner Owner Occupied	—	—		—		—	—		—
Commercial real estate	—	—		—		—	—		—

Residential real estate	8	911		911		9	558		558
Home equity	1	30		30		—	—		—
Consumer	—	—		—		—	—		—
Total	9	$	941	$	941	9	$	558	$	558

Most TDRs above are reported due to filing Chapter 7 bankruptcy. Regulatory guidance requires that loans be accounted for as collateral-dependent loans when borrowers have filed Chapter 7 bankruptcy, the debt has been discharged by the bankruptcy court and the borrower has not reaffirmed the debt. The filing of bankruptcy is deemed to be evidence that the borrower is in financial difficulty and the discharge of debt by the bankruptcy court is deemed to be a concession granted to the borrower.

In March of 2020, in response to the COVID-19 pandemic, regulatory guidance was issued that clarified the accounting for loan modifications. Modifications of loan terms do not automatically result in a TDR. Short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extension of repayment terms, or other delays that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time of modification. In addition, modifications or deferrals pursuant to the CARES Act do not represent TDRs. However, these deferrals do not absolve the company from performing its normal risk rating and therefore a loan could be current and have a less than satisfactory risk rating.

Through June 30, 2022, the Company granted deferrals of approximately $143 million to its mortgage customers. These deferral arrangements ranged from 30 days to 90 days. As of June 30, 2022, approximately $0.3 million of these loans were still deferring, while approximately $143 million have resumed making their normal loan payment. As of June 30, 2022, approximately $4 million of the loans previously deferred were previously and currently considered TDRs due to Chapter 7 bankruptcies. As of June 30, 2022, all outstanding commercial deferrals had resumed making their normal loan payment.

following criteria: balance sheet yields; ratios and leverage; cash flow spread and coverage; prior history; capability of management; market position/industry; potential impact of changing economic, legal, regulatory or environmental conditions; purpose; structure; collateral support; and guarantor support. Risk grades are generally assigned by the primary lending officer and are periodically evaluated by the Company’s internal loan review process. Based on an individual loan’s risk grade, estimated loss percentages are applied to the outstanding balance of the loan to determine the amount of expected loss.

The Company categorizes loans into risk categories based on relevant information regarding the customer’s debt service ability, capacity and overall collateral position, along with other economic trends and historical payment performance. The risk rating for each credit is updated when the Company receives current financial information, the loan is reviewed by the Company’s internal loan review and credit administration departments, or the loan becomes delinquent or impaired. The risk grades are updated a minimum of annually for loans rated Exceptional, Good, Acceptable, or Pass/Watch. Loans rated Special Mention, Substandard or Doubtful are reviewed at least quarterly. The Company uses the following definitions for its risk ratings:


Risk Rating			Description
Pass Ratings:
(a) Exceptional			Loans classified as exceptional are secured with liquid collateral conforming to the internal loan policy. Loans rated within this category pose minimal risk of loss to the bank.
(b) Good			Loans classified as good have similar characteristics that include a strong balance sheet, satisfactory debt service coverage ratios, strong management and/or guarantors, and little exposure to economic cycles. Loans in this category generally have a low chance of loss to the bank.
(c) Acceptable			Loans classified as acceptable have acceptable liquidity levels, adequate debt service coverage ratios, experienced management, and have average exposure to economic cycles. Loans within this category generally have a low risk of loss to the bank.
(d) Pass/watch			Loans classified as pass/watch have erratic levels of leverage and/or liquidity, cash flow is volatile and the borrower is subject to moderate economic risk. A borrower in this category poses a low to moderate risk of loss to the bank.
Special mention			Loans classified as special mention have a potential weakness(es) that deserves management’s close attention. The potential weakness could result in deterioration of the loan repayment or the bank’s credit position at some future date. A loan rated in this category poses a moderate loss risk to the bank.
Substandard			Loans classified as substandard reflect a customer with a well-defined weakness that jeopardizes the liquidation of the debt. Loans in this category have the possibility that the bank will sustain some loss if the deficiencies are not corrected and the bank’s collateral value is weakened by the financial deterioration of the borrower.
Doubtful			Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that make collection of the full contract amount highly improbable. Loans rated in this category are most likely to cause the bank to have a loss due to a collateral shortfall or a negative capital position.


													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	30,359	$	93,159	$	65,730	$	28,957	$	24,397	$	12,088	$	95,930	$	350,620
Special mention	—		—		443		11		—		20		3,200		3,674
Substandard	965		591		624		1,366		345		1,647		649		6,187
Total	$	31,324	$	93,750	$	66,797	$	30,334	$	24,742	$	13,755	$	99,779	$	360,481


December 31, 2021	2021		2020		2019		2018		2017		Prior
Commercial and industrial
Pass	$	87,148	$	82,946	$	41,908	$	27,355	$	23,895	$	6,755	$	65,775	$	335,782
Special mention	3		480		17		—		21		—		3,324		3,845
Substandard	319		1,531		1,574		510		395		1,550		678		6,557
Total	$	87,470	$	84,957	$	43,499	$	27,865	$	24,311	$	8,305	$	69,777	$	346,184


June 30, 2022	2022		2021		2020		2019		2018		Prior
Commercial real estate -
1-4 Family
Pass	$	15,142	$	23,223	$	13,592	$	9,281	$	5,563	$	27,638	$	10,861	$	105,300
Special mention	233		—		118		—		—		378		—		729
Substandard	89		—		269		70		—		2,308		—		2,736
Total	$	15,464	$	23,223	$	13,979	$	9,351	$	5,563	$	30,324	$	10,861	$	108,765


December 31, 2021	2021		2020		2019		2018		2017		Prior
Commercial real estate -
1-4 Family
Pass	$	26,425	$	16,163	$	10,659	$	6,208	$	4,250	$	28,734	$	10,877	$	103,316
Special mention	—		122		—		—		—		718		—		840
Substandard	—		276		158		—		722		2,561		—		3,717
Total	$	26,425	$	16,561	$	10,817	$	6,208	$	4,972	$	32,013	$	10,877	$	107,873


													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Hotels
Pass	$	59,931	$	37,348	$	12,633	$	63,529	$	20,880	$	87,984	$	206	$	282,511
Special mention	—		—		—		24,533		—		—		—		24,533
Substandard	127		58		3,289		—		—		27,392		—		30,866
Total	$	60,058	$	37,406	$	15,922	$	88,062	$	20,880	$	115,376	$	206	$	337,910


December 31, 2021	2021		2020		2019		2018		2017		Prior
Commercial real estate -
Hotels
Pass	$	38,197	$	16,183	$	64,107	$	21,222	$	41,526	$	55,895	$	279	$	237,409
Special mention	103		—		29,914		—		—		—		—		30,017
Substandard	398		140		15,413		—		5,601		22,337		—		43,889
Total	$	38,698	$	16,323	$	109,434	$	21,222	$	47,127	$	78,232	$	279	$	311,315


June 30, 2022	2022		2021		2020		2019		2018		Prior
Commercial real estate -
Multi-family
Pass	$	9,421	$	22,050	$	68,455	$	49,217	$	2,226	$	51,987	$	440	$	203,796
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		60		—		60
Total	$	9,421	$	22,050	$	68,455	$	49,217	$	2,226	$	52,047	$	440	$	203,856


December 31, 2021	2021		2020		2019		2018		2017		Prior
Commercial real estate -
Multi-family
Pass	$	20,434	$	78,837	$	53,033	$	2,264	$	19,783	$	38,918	$	540	$	213,809
Special mention	—		—		1,802		—		—		—		—		1,802
Substandard	—		—		—		—		—		66		—		66
Total	$	20,434	$	78,837	$	54,835	$	2,264	$	19,783	$	38,984	$	540	$	215,677


													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
June 30, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Commercial real estate -
Total
Pass	$	124,604	$	235,694	$	213,194	$	223,973	$	138,211	$	345,105	$	17,494	$	1,298,275
Special mention	233		114		295		25,063		—		1,325		114		27,144
Substandard	1,191		899		3,676		3,605		2,822		43,355		992		56,540
Total	$	126,028	$	236,707	$	217,165	$	252,641	$	141,033	$	389,785	$	18,600	$	1,381,959

December 31, 2021	2021		2020		2019		2018		2017		Prior
Commercial real estate -
Total
Pass	$	276,429	$	275,141	$	238,742	$	151,509	$	114,626	$	291,696	$	16,860	$	1,365,003
Special mention	222		334		34,647		299		319		3,151		—		38,972
Substandard	1,238		546		19,308		2,769		13,023		37,191		866		74,941
Total	$	277,889	$	276,021	$	292,697	$	154,577	$	127,968	$	332,038	$	17,726	$	1,478,916

June 30, 2022	2022		2021		2020		2019		2018		Prior
Residential real estate
Performing	$	262,192	$	356,382	$	289,758	$	132,534	$	93,352	$	418,528	$	96,698	$	1,649,444
Non-performing	—		204		—		224		37		828		268		1,561
Total	$	262,192	$	356,586	$	289,758	$	132,758	$	93,389	$	419,356	$	96,966	$	1,651,005

December 31, 2021	2021		2020		2019		2018		2017		Prior
Residential real estate
Performing	$	375,465	$	326,107	$	155,829	$	110,551	$	87,870	$	389,519	$	100,815	$	1,546,156
Non-performing	—		—		232		29		120		692		1,736		2,809
Total	$	375,465	$	326,107	$	156,061	$	110,580	$	87,990	$	390,211	$	102,551	$	1,548,965


June 30, 2022	2022		2021		2020		2019		2018		Prior
Home equity
Performing	$	8,025	$	8,142	$	5,524	$	3,265	$	2,595	$	8,623	$	89,514	$	125,688
Non-performing	—		—		—		—		—		—		54		54
Total	$	8,025	$	8,142	$	5,524	$	3,265	$	2,595	$	8,623	$	89,568	$	125,742


December 31, 2021	2021		2020		2019		2018		2017		Prior
Home equity
Performing	$	9,008	$	6,474	$	3,582	$	2,949	$	1,431	$	8,176	$	90,685	$	122,305
Non-performing	—		—		—		—		—		—		40		40
Total	$	9,008	$	6,474	$	3,582	$	2,949	$	1,431	$	8,176	$	90,725	$	122,345