10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-21714

CSB Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

Ohio	34-1687530
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
91 North Clay Street, P.O. Box 232 Millersburg, OH	44654
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (330) 674-9015

Securities registered pursuant to Section 12(g) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, $6.25 par value	CSBB	OTCPink

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 such filing requirements for the past 90 days. Yes ☒ 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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of November 1, 2023, the registrant had 2,671,313 shares of common stock, $6.25 par value per share, outstanding.

CSB BANCORP, INC.

FORM 10-Q

QUARTER ENDED September 30, 2023

Table of Contents

	Part I - Financial Information
		Page
ITEM 1 –	FINANCIAL STATEMENTS (Unaudited)	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income (Loss)	5
	Consolidated Statements of Changes in Shareholders' Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
ITEM 2 –	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	30
ITEM 3 –	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	38
ITEM 4 –	CONTROLS AND PROCEDURES	39
	Part II - Other Information
ITEM 1 –	Legal Proceedings	40
ITEM 1A –	Risk Factors	40
ITEM 2 –	Unregistered Sales of Equity Securities and Use of Proceeds	40
ITEM 3 –	Defaults upon Senior Securities	40
ITEM 4 –	Mine Safety Disclosures	40
ITEM 5 –	Other Information	40
ITEM 6 –	Exhibits	41
	Signatures	42

2

CSB BANCORP, INC.

PART I – FINANCIAL INFORMATION

ITEM 1. – FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30,			December 31,
(Dollars in thousands, except per share data)	2023			2022
ASSETS
Cash and cash equivalents
Cash and due from banks	$	20,409		$	19,911
Interest-earning deposits with banks		29,000			66,509
Total cash and cash equivalents		49,409			86,420
Securities
Available-for-sale, at fair value		145,330			150,069
Held-to-maturity (fair value 2023-$187,695; 2022-$211,954)		230,505			247,401
Equity securities		246			244
Restricted stock, at cost		1,561			3,430
Total securities		377,642			401,144
Loans held for sale		—			52
Loans		680,949			627,171
Less allowance for credit losses		6,691			6,838
Net loans		674,258			620,333
Premises and equipment, net		13,105			13,414
Bank-owned life insurance		25,229			24,709
Goodwill		4,728			4,728
Accrued interest receivable and other assets		12,227			8,308
TOTAL ASSETS	$	1,156,598		$	1,159,108
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Noninterest-bearing	$	300,018		$	350,283
Interest-bearing		718,057			673,134
Total deposits		1,018,075			1,023,417
Short-term borrowings		30,734			32,550
Other borrowings		1,808			2,461
Allowance for credit losses on off-balance sheet commitments		492			141
Accrued interest payable and other liabilities		4,079			4,619
TOTAL LIABILITIES		1,055,188			1,063,188
SHAREHOLDERS' EQUITY
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued    2,980,602 shares; outstanding 2,671,313 shares in 2023 and 2,707,576 in 2022		18,629			18,629
Additional paid-in capital		9,815			9,815
Retained earnings		94,614			86,502
Treasury stock at cost: 309,289 shares in 2023 and 273,026 shares in 2022		(7,481	)		(6,107	)
Accumulated other comprehensive loss		(14,167	)		(12,919	)
TOTAL SHAREHOLDERS' EQUITY		101,410			95,920
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,156,598		$	1,159,108

See notes to unaudited consolidated financial statements.

3

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands, except per share data)	2023			2022			2023			2022
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	9,175		$	6,680		$	25,855		$	18,489
Taxable securities		1,910			1,780			5,867			4,721
Nontaxable securities		102			110			305			328
Other		531			586			1,520			863
Total interest and dividend income		11,718			9,156			33,547			24,401
INTEREST EXPENSE
Deposits		2,772			559			6,484			1,252
Short-term borrowings		100			25			236			51
Other borrowings		9			12			31			43
Total interest expense		2,881			596			6,751			1,346
NET INTEREST INCOME		8,837			8,560			26,796			23,055
CREDIT LOSS EXPENSE
Provision (recovery) for credit loss expense - loans		13			(250	)		287			(895	)
Provision (recovery) for credit loss expense - off-balance sheet commitments		164			—			(1	)		—
Total provision (recovery) for credit loss expense		177			(250	)		286			(895	)
NET INTEREST INCOME AFTER CREDIT LOSS EXPENSE		8,660			8,810			26,510			23,950
NONINTEREST INCOME
Service charges on deposit accounts		332			321			924			875
Trust services		259			216			769			733
Debit card interchange fees		525			530			1,579			1,568
Credit card fees		166			170			535			516
Gain on sale of loans, net		47			49			106			314
Earnings on bank owned life insurance		179			170			520			504
Unrealized gain (loss) on equity securities, net		(11	)		(2	)		2			2
Other income		208			221			631			587
Total noninterest income		1,705			1,675			5,066			5,099
NONINTEREST EXPENSES
Salaries and employee benefits		3,429			3,199			10,112			9,766
Occupancy expense		290			272			856			820
Equipment expense		199			193			595			604
Professional and director fees		366			555			1,073			1,161
Financial institutions tax		192			195			576			584
Marketing and public relations		124			141			383			362
Software expense		408			397			1,228			1,056
Debit card expense		179			201			494			550
FDIC insurance expense		131			93			380			251
Other expenses		716			699			2,105			2,033
Total noninterest expenses		6,034			5,945			17,802			17,187
Income before income taxes		4,331			4,540			13,774			11,862
FEDERAL INCOME TAX PROVISION		850			890			2,715			2,302
NET INCOME	$	3,481		$	3,650		$	11,059		$	9,560
Basic and diluted net earnings per share	$	1.30		$	1.35		$	4.12		$	3.52

See notes to unaudited consolidated financial statements

4

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2023			2022			2023			2022
Net income	$	3,481		$	3,650		$	11,059		$	9,560
Other comprehensive loss
Unrealized losses arising during the period		(1,127	)		(5,189	)		(1,722	)		(15,334	)
Amortization of discount on securities transferred to held-to-maturity		50			64			143			237
Income tax effect		226			1,076			331			3,170
Other comprehensive loss		(851	)		(4,049	)		(1,248	)		(11,927	)
Total comprehensive income (loss)	$	2,630		$	(399	)	$	9,811		$	(2,367	)

See notes to unaudited consolidated financial statements.

5

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands, except per share data)	Common stock		Additional paid-in capital		Retained earnings			Treasury stock			Accumulated other comprehensive loss			Total
Three Months Ended September 30, 2023
Balance, beginning of period	$	18,629	$	9,815	$	92,149		$	(7,137	)	$	(13,316	)	$	100,140
Net income		—		—		3,481			—			—			3,481
Other comprehensive loss		—		—		—			—			(851	)		(851	)
Purchase of 9,012 treasury shares		—		—		—			(344	)		—			(344	)
Cash dividends declared, $0.38 per share		—		—		(1,016	)		—			—			(1,016	)
Balance, September 30, 2023	$	18,629	$	9,815	$	94,614		$	(7,481	)	$	(14,167	)	$	101,410
Nine Months Ended September 30, 2023
Balance, beginning of period	$	18,629	$	9,815	$	86,502		$	(6,107	)	$	(12,919	)	$	95,920
Net income		—		—		11,059			—			—			11,059
Cumulative effect of adoption of ASU 2016-13		—		—		52			—			—			52
Other comprehensive loss		—		—		—			—			(1,248	)		(1,248	)
Purchase of 36,263 treasury shares		—		—		—			(1,374	)		—			(1,374	)
Cash dividends declared, $1.12 per share		—		—		(2,999	)		—			—			(2,999	)
Balance, September 30, 2023	$	18,629	$	9,815	$	94,614		$	(7,481	)	$	(14,167	)	$	101,410
Three Months Ended September 30, 2022
Balance, beginning of period	$	18,629	$	9,815	$	80,940		$	(5,719	)	$	(10,003	)	$	93,662
Net income		—		—		3,650			—			—			3,650
Other comprehensive loss		—		—		—			—			(4,049	)		(4,049	)
Purchase of 10,448 treasury shares		—		—		—			(388	)		—			(388	)
Cash dividends declared, $0.33 per share		—		—		(894	)		—			—			(894	)
Balance, September 30, 2022	$	18,629	$	9,815	$	83,696		$	(6,107	)	$	(14,052	)	$	91,981
Nine Months Ended September 30, 2022
Balance, beginning of period	$	18,629	$	9,815	$	76,715		$	(5,719	)	$	(2,125	)	$	97,315
Net income		—		—		9,560			—			—			9,560
Other comprehensive loss		—		—		—			—			(11,927	)		(11,927	)
Purchase of 10,448 treasury shares		—		—		—			(388	)		—			(388	)
Cash dividends declared, $0.95 per share		—		—		(2,579	)		—			—			(2,579	)
Balance, September 30, 2022	$	18,629	$	9,815	$	83,696		$	(6,107	)	$	(14,052	)	$	91,981

See notes to unaudited consolidated financial statements.

6

CSB BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
(Dollars in thousands)	2023			2022
NET CASH FROM OPERATING ACTIVITIES	$	8,079		$	8,894
CASH FLOWS FROM INVESTING ACTIVITIES
Securities:
Proceeds from repayments, available-for-sale		7,088			11,293
Proceeds from repayments, held-to-maturity		16,798			16,901
Purchases, available-for-sale		(4,458	)		(38,868	)
Purchases, held-to-maturity		—			(94,542	)
Purchases, equity securities		—			(131	)
Redemption of FHLB stock		1,869			1,183
Loan originations, net		(53,895	)		(61,004	)
Property, equipment, and software acquisitions		(308	)		(217	)
Net cash used in investing activities		(32,906	)		(165,385	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in deposits		(5,342	)		26,527
Net decrease in short-term borrowings		(1,816	)		(2,331	)
Repayment of other borrowings		(653	)		(879	)
Cash dividends paid		(2,999	)		(2,579	)
Purchase of treasury shares		(1,374	)		(388	)
Net cash (used in) provided by financing activities		(12,184	)		20,350
NET DECREASE IN CASH AND CASH EQUIVALENTS		(37,011	)		(136,141	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		86,420			243,657
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	49,409		$	107,516
SUPPLEMENTAL DISCLOSURES
Cash paid during the year for:
Interest	$	6,584		$	1,351
Income taxes		3,365			1,760

See notes to unaudited consolidated financial statements.

7

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements include the accounts of CSB Bancorp, Inc. and its wholly-owned subsidiaries, The Commercial and Savings Bank (the “Bank”) and CSB Investment Services, LLC (together referred to as the “Company” or “CSB”). All significant intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated financial statements have been prepared without audit. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the Company’s financial position at September 30, 2023, and the results of operations and changes in cash flows for the periods presented have been made.

Certain information and footnote disclosures typically included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been omitted. The Annual Report for CSB for the year ended December 31, 2022, contains Consolidated Financial Statements and related footnote disclosures, which should be read in conjunction with the accompanying condensed Consolidated Financial Statements. The results of operations for the periods ended September 30, 2023 are not necessarily indicative of the operating results for the full year or any future interim period.

Certain items in the prior-year financial statements were reclassified to conform to the current-year presentation. Such reclassifications had no effect on net income or shareholders’ equity.

ALLOWANCE FOR CREDIT LOSSES - LOANS AND LEASES POLICY

In connection with our adoption of ASU 2016-13, we made changes to our loan portfolio segments to align with the methodology applied in determining the allowance under CECL. Refer to Note 3 Loans, for further discussion of these portfolio segments. In addition to our existing segments, our new segmentation breaks out commercial lessors of buildings, and consumer indirect loans as well as separating consumer mortgage loans from home equity line of credit loans.

The ACL is a valuation reserve established and maintained by charges against operating income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The ACL is an estimate of expected credit losses, measured over the contractual life of a loan (adjusted for expected prepayment), that considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.

The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.

The ACL for homogeneous loans is calculated using a life-time loss rate methodology with both a quantitative and a qualitative analysis that is applied on a quarterly basis. The ACL model is comprised of eight distinct portfolio segments: 1) Commercial and Industrial or C&I, 2) Commercial Real Estate, or CRE, 3) Commercial Lessors of Buildings, 4) Construction, 5) Consumer Mortgage, 6) Home Equity Line of Credit or HELOC, 7) Consumer Installment, and 8) Consumer Indirect loans. Each segment has a distinct set of risk characteristics monitored by management. We further evaluate the ACL at a disaggregated level which includes type of collateral, loan participations, non-owner occupied and our internal risk rating system for the commercial segments, and type of collateral and lien position, for the consumer segments.

8

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Historical credit loss experience is the basis for the estimation of expected credit losses. We apply historical loss rates to pools of loans with similar risk characteristics. After consideration of the historic loss calculation, management applies qualitative adjustments to reflect the current conditions and reasonable and supportable forecasts not already reflected in the historical loss information at the balance sheet date. Our reasonable and supportable forecast adjustment is based on the unemployment forecast and management judgment. For periods beyond our two-year reasonable and supportable forecast, we revert to the historical loss rate. The qualitative adjustments for current conditions are based upon changes in lending policies and practices, change in economic conditions, change in nature of the portfolio, experience and ability of lending staff, problem loan trends, quality of the bank’s loan review system, value of underlying collateral for collateral dependent loans, the existence of and changes in concentrations, and other external factors. These modified historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve. A similar process is employed to calculate a reserve assigned to the portion of off-balance sheet commitments that we expect to fund, specifically unfunded loan commitments, and any needed reserve is recorded in other liabilities.

The ACL for individual loans begins with the use of normal credit review procedures to identify whether a loan no longer shares similar risk characteristics with other pooled loans and therefore, should be individually assessed. We evaluate all commercial loans greater than $500 thousand that meet the following criteria: 1) when it is determined that foreclosure is probable, 2) substandard, doubtful and nonperforming loans when repayment is expected to be provided substantially through the operation or sale of the collateral, and 3) when it is determined by management that a loan does not share similar risk characteristics with other loans. Collateral values are discounted to consider disposition costs when appropriate. A specific reserve is established or a charge-off is taken if the fair value of the loan is less than the loan balance.

Although we believe our process for determining the ACL appropriately considers all the factors that would likely result in credit losses, the process includes subjective elements and may be susceptible to significant change. To the extent actual losses are higher than management estimates, additional provision for credit losses could be required and could adversely affect our earnings or financial position in future periods.

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

In preparing the Consolidated Financial Statements, in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Balance Sheets and reported amounts of revenues and expenses during each reporting period. Actual results could differ from those estimates. The most significant estimates susceptible to change in the near term relate to management’s determination of the allowance for credit losses and the fair value of financial instruments.

ACCOUNTING PRONOUNCEMENTS ADOPTED IN 2023

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and subsequent related updates. This ASU replaces the incurred loss methodology for recognizing credit losses and requires businesses and other organizations to measure the current expected credit losses (CECL) on financial assets measured at amortized cost, including loans and held-to-maturity securities, net investments in leases, off-balance sheet credit exposures such as unfunded commitments, and other financial instruments. In addition, ASC 326 requires credit losses on available-for-sale debt securities to be presented as an allowance rather than as a write-down when management does not intend to sell or believes that it is not more likely than not they will be required to sell the debt securities. This guidance became effective on January 1, 2023 for the Bank. The results reported for periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable accounting standards.

9

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Bank adopted this guidance, and subsequent related updates, using the modified retrospective approach for all financial assets measured at amortized cost, including loans and held-to-maturity debt securities, available-for-sale debt securities and unfunded commitments. On January 1, 2023, the Bank recorded a cumulative effect increase to retained earnings of $52 thousand, net of tax, of which $442 thousand related to loans, offset by $390 thousand related to unfunded commitments, net of tax. There was no allowance for credit losses recorded for either available-for-sale or held-to-maturity debt securities. See Note 3 for further discussion on the adoption of CECL.

The Bank adopted the provisions of ASC 326 related to presenting other-than-temporary impairment on available-for- sale debt securities on January 1, 2023 using the prospective transition approach, though no such charges had been recorded on the securities held by the Bank as of the date of adoption.

The Bank expanded the pooling utilized under the legacy incurred loss method to include additional segmentation based on risk. The impact of the change from the incurred loss model to the current expected credit loss model is detailed below:

	January 1, 2023
(Dollars in thousands)	Pre-adoption		Adoption Impact			As Reported
Assets:
ACL on loans
Commercial and industrial	$	1,110	$	658		$	1,768
Commercial real estate		2,760		(541	)		2,219
Commercial lessors of buildings		—		974			974
Construction		803		(515	)		288
Consumer mortgage		1,268		(580	)		688
Home equity line of credit		—		201			201
Consumer installment		233		(183	)		50
Consumer indirect		—		91			91
Unallocated		664		(664	)		—
Total allowance for credit losses - loans		6,838		(559	)	$	6,279
Liabilities:
ACL for off-balance sheet commitments		—		493			493
Total allowance for credit losses	$	6,838		(66	)	$	6,772

The following table presents the Bank's loan portfolio, prior to the adoption of ASC 326, by category of loans and the impact of the change from the adoption of the standard:

(Dollars in thousands)	December 31, 2022			Adoption Impact			Post Adoption January 1, 2023
Commercial and industrial	$	129,343		$	(2,209	)	$	127,134
Commercial real estate		231,785			(70,625	)		161,160
Commercial lessors of buildings		—			83,728			83,728
Construction		55,318			(10,452	)		44,866
Consumer mortgage		194,125			(44,338	)		149,787
Home equity line of credit		—			44,243			44,243
Consumer installment		16,387			(6,730	)		9,657
Consumer indirect		—			6,383			6,383
	$	626,958		$	—		$	626,958
Gross loans prior to deferred fees
Deferred loan costs, net		213			—			213
Allowance for credit losses		(6,838	)		559			(6,279	)
Total net loans	$	620,333		$	559		$	620,892

10

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments – Credit Losses (ASC 326): Troubled Debt Restructurings (TDRs) and Vintage Disclosures”. The guidance amends ASC 326 to eliminate the accounting guidance for TDRs by creditors, while enhancing disclosure requirements for certain loan refinancing and restructuring activities by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying TDR recognition and measurement guidance, creditors will determine whether a modification results in a new loan or continuation of existing loan. The guidance also requires disclosures about the performance of modified loans to borrowers experiencing financial difficulty in the 12 months following the modification.

These amendments are intended to enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, the amendments to ASC 326 require that an entity disclose current period gross write-offs by year of origination within the vintage disclosures, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The guidance is only for entities that have adopted the amendments in Update 2016-13. This guidance has been adopted as of January 1, 2023, however, there have been no reportable loan modifications during the nine months ended September 30, 2023.

11

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2 – SECURITIES

Securities consist of the following on September 30, 2023 and December 31, 2022:

(Dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
September 30, 2023
Available-for-sale
U.S. Treasury securities	$	23,133	$	—	$	(675	)	$	22,458
U.S. Government agencies		13,999		—		(1,151	)		12,848
Mortgage-backed securities of government agencies		74,457		2		(10,008	)		64,451
Asset-backed securities of government agencies		569		—		(17	)		552
State and political subdivisions		20,372		—		(1,573	)		18,799
Corporate bonds		29,158		—		(2,936	)		26,222
Total available-for-sale		161,688		2		(16,360	)		145,330
Held-to-maturity
U.S. Treasury securities	$	10,292	$	—	$	(1,083	)	$	9,209
Mortgage-backed securities of government agencies		217,656		—		(41,334	)		176,322
State and political subdivisions		2,557		—		(393	)		2,164
Total held-to-maturity		230,505		—		(42,810	)		187,695
Equity securities		185		61		—			246
Restricted stock		1,561		—		—			1,561
Total securities	$	393,939	$	63	$	(59,170	)	$	334,832
December 31, 2022
Available-for-sale
U.S. Treasury securities	$	23,194	$	—	$	(969	)	$	22,225
U.S. Government agencies		13,999		—		(1,369	)		12,630
Mortgage-backed securities of government agencies		77,677		72		(8,859	)		68,890
Asset-backed securities of government agencies		633		—		(15	)		618
State and political subdivisions		20,462		—		(985	)		19,477
Corporate bonds		28,740		—		(2,511	)		26,229
Total available-for-sale		164,705		72		(14,708	)		150,069
Held-to-maturity
U.S Treasury securities	$	12,753	$	—	$	(1,136	)	$	11,617
Mortgage-backed securities of government agencies		232,068		—		(34,051	)		198,017
State and political subdivisions		2,580		1		(261	)		2,320
Total held-to-maturity		247,401		1		(35,448	)		211,954
Equity securities		185		59		—			244
Restricted stock		3,430		—		—			3,430
Total securities	$	415,721	$	132	$	(50,156	)	$	365,697

12

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2 – SECURITIES (continued)

The amortized cost and fair value of debt securities on September 30, 2023, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(Dollars in thousands)	Amortized cost		Fair value
Available-for-sale
Due in one year or less	$	15,006	$	14,780
Due after one through five years		55,512		51,631
Due after five through ten years		24,135		21,304
Due after ten years		67,035		57,615
Total debt securities available-for-sale	$	161,688	$	145,330
Held-to-maturity
Due in one year or less	$	—	$	—
Due after one through five years		7,434		6,876
Due after five through ten years		5,138		4,295
Due after ten years		217,933		176,524
Total debt securities held-to-maturity	$	230,505	$	187,695

Securities with a fair value of approximately $129.1 million and $110.1 million were pledged on September 30, 2023 and December 31, 2022, respectively, to secure public deposits, as well as other deposits and borrowings as required or permitted by law.

Restricted stock primarily consists of investments in Federal Home Loan Bank of Cincinnati (FHLB) and Federal Reserve Bank stock. The Bank’s investment in FHLB stock amounted to approximately $1.0 million and $2.9 million on September 30, 2023 and December 31, 2022. The FHLB has redeemed approximately $1.9 million in stock at $100 par value per share during the nine month period ended September 30, 2023. Federal Reserve Bank stock was $471 thousand on September 30, 2023 and December 31, 2022.

There were no proceeds from sales of securities for the three and nine-month periods ended September 30, 2023, and 2022. All gains and losses recognized on equity securities during the three and nine-month periods were unrealized.

13

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2 – SECURITIES (continued)

The following table presents gross unrealized losses and fair value of securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, on September 30, 2023 and December 31, 2022:

	Securities in a continuous unrealized loss position
	Less than 12 months					12 months or more					Total
(Dollars in thousands)	Gross unrealized losses			Fair value		Gross unrealized losses			Fair value		Gross unrealized losses			Fair value
September 30, 2023
Available-for-sale
U.S. Treasury securities	$	—		$	—	$	(675	)	$	22,458	$	(675	)	$	22,458
U.S. Government agencies		—			—		(1,151	)		12,848		(1,151	)		12,848
Mortgage-backed securities of government    agencies		(235	)		12,748		(9,773	)		51,513		(10,008	)		64,261
Asset-backed securities of government    agencies		—			—		(17	)		552		(17	)		552
State and political subdivisions		(79	)		1,952		(1,494	)		16,622		(1,573	)		18,574
Corporate bonds		(1	)		492		(2,935	)		25,730		(2,936	)		26,222
Held-to-maturity
U.S. Treasury securities		—			—		(1,083	)		9,209		(1,083	)		9,209
Mortgage-backed securities of government    agencies		(356	)		8,080		(40,978	)		168,233		(41,334	)		176,313
State and political subdivisions		(21	)		393		(372	)		1,771		(393	)		2,164
Total securities with unrealized losses	$	(692	)	$	23,665	$	(58,478	)	$	308,936	$	(59,170	)	$	332,601
December 31, 2022
Available-for-sale
U.S. Treasury securities	$	(798	)	$	17,405	$	(171	)	$	4,820	$	(969	)	$	22,225
U.S. Government agencies		—			—		(1,369	)		12,630		(1,369	)		12,630
Mortgage-backed securities of government    agencies		(1,046	)		16,188		(7,813	)		44,519		(8,859	)		60,707
Asset-backed securities of government    agencies		—			—		(15	)		618		(15	)		618
State and political subdivisions		(189	)		9,079		(796	)		9,848		(985	)		18,927
Corporate bonds		(1,165	)		13,502		(1,346	)		12,727		(2,511	)		26,229
Held-to-maturity
U.S. Treasury securities		—			—		(1,136	)		11,617		(1,136	)		11,617
Mortgage-backed securities of government    agencies		(9,733	)		79,325		(24,318	)		118,692		(34,051	)		198,017
State and political subdivisions		—			—		(261	)		1,903		(261	)		1,903
Total securities with unrealized losses	$	(12,931	)	$	135,499	$	(37,225	)	$	217,374	$	(50,156	)	$	352,873

14

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2 – SECURITIES (continued)

There were 203 securities in an unrealized loss position on September 30, 2023, 183 of which were in a continuous loss position for twelve (12) months or more. Each quarter the Company conducts a comprehensive security-level impairment assessment on the securities portfolio. Management believes the Company will fully recover the cost of these securities. Unrealized losses on the Company’s fixed-rate debt securities are a result of interest rate increases. U.S. Treasury securities and investments in securities of U.S. government sponsored agency bonds comprise $100 million of total AFS securities. The remaining $45 million of non-agency debt securities is made up of Corporate Bonds and debt securities to State and Political Subdivisions. For non-agency debt securities, the Company verified the current credit ratings remain above investment grade. Non-rated debt securities total $5 million. Annually, management reviews the credit profile of each non-rated issue and assesses whether any impairment to the contractually obligated cash flow is likely to occur. Based on these reviews, management has concluded the underlying creditworthiness for each security remains sufficient to maintain required payment obligations and, therefore, no allowance for credit losses has been recorded. Management believes the value will recover as the securities approach maturity or market interest rates change.

The Bank monitors the credit quality of held-to-maturity debt securities primarily through utilizing their credit rating. The Bank monitors the credit rating on a quarterly basis. There are no nonperforming held-to-maturity securities. As of September 30, 2023, no ACL was required for any held-to-maturity security. The majority of the securities are explicitly or implicitly guaranteed by the United States government, and any estimate of expected credit losses would be insignificant to the Bank. The following table summarizes the amortized cost of held-to maturity debt securities at September 30, 2023, aggregated by credit quality indicator:

(Dollars in thousands)	U.S. Treasury securities		Mortgage- backed securities of government agencies		State and political subdivisions
September 30, 2023
Credit rating:
AAA / AA / A	$	10,292	$	217,656	$	2,557
BBB / BB / B		—		—		—
Lower than B		—		—		—
Non-rated		—		—		—
Total	$	10,292	$	217,656	$	2,557

15

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS

The composition of net loans receivable as of September 30, 2023 and December 31, 2022:

(Dollars in thousands)	September 30, 2023
Commercial and industrial	$	143,227
Commercial real estate		188,910
Commercial lessors of buildings		78,520
Construction		44,446
Consumer mortgage		167,419
Home equity line of credit		41,093
Consumer installment		11,197
Consumer indirect		6,168
Total loans		680,980
Allowance for credit losses		(6,691	)
Deferred loan fees, net		(31	)
Net Loans	$	674,258

(Dollars in thousands)	December 31, 2022
Commercial and industrial	$	129,343
Commercial real estate		231,785
Residential real estate		194,125
Construction & land development		55,318
Consumer		16,387
Total loans		626,958
Allowance for loan losses		(6,838	)
Deferred loan costs, net		213
Total Loans *	$	620,333

* See Note 1 for reclassification of balances due to the adoption of ASC 326.

Loan Origination/Risk Management

The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.

Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationship banking rather than transactional banking. The Company’s management examines current and occasionally projected cash flows to determine the ability of the borrower to repay their obligations as agreed. Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers; however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable, inventory, and equipment, and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

16

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single industry. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied.

With respect to loans to developers and builders that are secured by non-owner-occupied properties, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing independent appraisal reviews, sensitivity analysis of absorption and lease rates, and financial analysis of the developers and property owners. Construction and land development loans are generally based upon estimates of costs and value associated with the completed project. These estimates may be inaccurate.

Construction and land development loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property, or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing.

The Company originates consumer loans utilizing a judgmental underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed, jointly by line and staff personnel. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, mitigates risk.

The Company maintains an independent credit department that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures.

Loans serviced for others approximated $132.2 and $137.5 million on September 30, 2023 and December 31, 2022, respectively.

17

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

Concentrations of Credit

Nearly all the Company’s lending activity occurs within the state of Ohio, including the four counties of Holmes, Stark, Tuscarawas and Wayne, as well as other markets. The majority of the Company’s loan portfolio consists of commercial and commercial real estate loans. Credit concentrations, including commitments, as determined using North American Industry Classification Codes (NAICS), to the two largest industries compared to total loans on September 30, 2023, included $62.9 million, or 9%, of total loans to lessors of non-residential buildings, and $39.6 million, or 6%, of total loans to manufacturers of animal food. These loans are generally secured by real property and equipment, with repayment expected from operational cash flow. Credit evaluation is based on a review of cash flow coverage of principal, interest payments, and the adequacy of the collateral received.

Allowance for Credit Losses

The following table details activity in the allowance for credit losses ("ACL") by portfolio segment for the three and nine months ended September 30, 2023. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

For the three months ended in September 2023, the decrease in the provision for commercial and industrial loans primarily relates to the recovery of prior loan charge-offs, as well as the decrease in substandard loan balances in this loan category. The remaining provision changes for the quarter are primarily a result of changes in loan volume in each loan category.

For the nine month period in 2023, the decrease in provision for commercial real estate loans is due to the payoff of one larger loan relationship with a specific allocation. The increase in the provision for commercial lessors of buildings relates to the increase in loans graded special mention in this category. All other changes during the nine month period are related to loan volume changes.

(Dollars in thousands)	Beginning Balance		Impact of Adopting ASC 326			Charge-offs			Recoveries		Provisions (Recovery)			Ending Balance
Three Months Ended September 30, 2023
Commercial and industrial	$	2,119	$	—		$	—		$	147	$	(303	)	$	1,963
Commercial real estate		1,882		—			—			8		239			2,129
Commercial lessors of buildings		1,237		—			—			—		(11	)		1,226
Construction		283		—			—			—		(28	)		255
Consumer mortgage		714		—			—			—		61			775
Home equity line of credit		178		—			—			—		9			187
Consumer installment		52		—			(8	)		—		13			57
Consumer indirect		94		—			(35	)		7		33			99
Unallocated		—		—			—			—		—			—
	$	6,559	$	—		$	(43	)	$	162	$	13		$	6,691
Nine Months Ended September 30, 2023
Commercial and industrial	$	1,110	$	658		$	—		$	166	$	29		$	1,963
Commercial real estate		2,760		(541	)		—			9		(99	)		2,129
Commercial lessors of buildings		—		974			—			—		252			1,226
Construction		803		(515	)		—			—		(33	)		255
Consumer mortgage		1,268		(580	)		—			1		86			775
Home equity line of credit		—		201			—			—		(14	)		187
Consumer installment		233		(183	)		(31	)		12		26			57
Consumer indirect		—		91			(66	)		34		40			99
Unallocated		664		(664	)		—			—		—			—
	$	6,838	$	(559	)	$	(97	)	$	222	$	287		$	6,691

18

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2022.

(Dollars in thousands)	Commercial and industrial			Commercial Real Estate			Residential Real Estate		Construction & Land Development			Consumer			Unallocated		Total
Three Months Ended September 30, 2022
Beginning balance	$	1,213		$	2,422		$	1,177	$	1,607		$	395		$	454	$	7,268
(Recovery of) provision for loan    losses		45			(298	)		111		(331	)		(137	)		360		(250	)
Charge-offs		(13	)		(12	)		—		—			(4	)				(29	)
Recoveries		4			—			1		—			14					19
Net (charge-offs) recoveries		(9	)		(12	)		1		—			10					(10	)
Ending balance	$	1,249		$	2,112		$	1,289	$	1,276		$	268		$	814	$	7,008
Nine Months Ended September 30, 2022
Beginning balance	$	1,240		$	2,838		$	992	$	1,380		$	421		$	747	$	7,618
(Recovery of) provision for loan    losses		30			(715	)		295		(416	)		(156	)		67		(895	)
Charge-offs		(31	)		(12	)		—		—			(28	)				(71	)
Recoveries		10			1			2		312			31					356
Net (charge-offs) recoveries		(21	)		(11	)		2		312			3					285
Ending balance	$	1,249		$	2,112		$	1,289	$	1,276		$	268		$	814	$	7,008

19

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

Age Analysis of Past-Due Loans Receivable and Nonperforming 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.

(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days + Past Due		Total Past Due		Total Loans
September 30, 2023
Commercial and industrial	$	143,026	$	184	$	17	$	—	$	201	$	143,227
Commercial real estate		188,576		334		—		—		334		188,910
Commercial lessors of buildings		78,520		—		—		—		—		78,520
Construction		44,446		—		—		—		—		44,446
Consumer mortgage		166,980		394		45		—		439		167,419
Home equity line of credit		40,874		219		—		—		219		41,093
Consumer installment		11,044		121		20		12		153		11,197
Consumer indirect		6,168		—		—		—		—		6,168
Total Loans	$	679,634	$	1,252	$	82	$	12	$	1,346	$	680,980

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of September 30, 2023:

(Dollars in thousands)	Nonaccrual with no ACL		Nonaccrual with ACL		Total Nonaccrual		Loans Past Due Over 90 Days Still Accruing		Total Nonperforming
September 30, 2023
Commercial and industrial	$	17	$	—	$	17	$	—	$	17
Commercial real estate		79		—		79		—		79
Commercial lessors of buildings		—		—		—		—		—
Construction		—		—		—		—		—
Consumer mortgage		110		—		110		—		110
Home equity line of credit		—		—		—		—		—
Consumer installment		16		—		16		12		28
Consumer indirect		26		—		26		—		26
Total Loans	$	248	$	—	$	248	$	12	$	260

Interest income recognized on nonaccrual loans for the nine months ended September 30, 2023 was $1 thousand on commercial real estate loans and $22 thousand on consumer mortgage loans. Several of the consumer mortgage loans are at an amortized cost basis of $0 and all payments are being recognized as interest income.

20

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

The following table presents the aging of past due loans and nonaccrual loans as of December 31, 2022:

			Accruing Loans
(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days + Past Due		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
December 31, 2022
Commercial and industrial	$	129,270	$	70	$	3	$	—	$	—	$	73	$	129,343
Commercial real estate		231,693		—		—		—		92		92		231,785
Residential real estate		193,794		95		137		—		99		331		194,125
Construction & land development		55,286		32		—		—		—		32		55,318
Consumer		16,091		103		128		—		65		296		16,387
Total Loans	$	626,134	$	300	$	268	$	—	$	256	$	824	$	626,958

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis includes all commercial loans before origination and an annual review of those with an outstanding commitment greater than $500 thousand. The Company uses the following definitions for risk ratings:

Pass. Loans classified as pass (Cash Secured, Exceptional, Acceptable, Monitor, or Pass Watch) may exhibit a wide array of characteristics but at a minimum represent an acceptable risk to the Bank. Borrowers in this rating may have leveraged but acceptable balance sheet positions, satisfactory asset quality, stable to favorable sales and earnings trends, acceptable liquidity and adequate cash flow. Loans are considered fully collectible and require an average amount of administration. While generally adhering to credit policy, these loans may exhibit occasional exceptions that do not result in undue risk to the Bank. Borrowers are generally capable of absorbing setbacks, financial and otherwise, without the threat of failure.

Special Mention. Assets assigned a Special Mention grade are not considered classified assets but are considered criticized. These assets exhibit potential weaknesses that, deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. Loans in this rating warrant special attention but have not yet reached the point of concern for loss. These assets have deteriorated sufficiently to the point they would have difficulty refinancing elsewhere. Similarly, purchasers of the business would not be eligible for bank financing unless they represent a significantly stronger credit risk.

Substandard. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

21

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans. Based on the most recent analysis performed, the following tables present the recorded investment in non-homogeneous loans by internal risk rating system as of September 30, 2023 and December 31, 2022:

	Term Loans Amortized Costs Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior						Total
September 30, 2023
Commercial and industrial:
Pass	$	21,665	$	27,127	$	13,867	$	5,840	$	4,057	$	8,540	$	45,546	$	—	$	126,642
Special mention		16		19		651		178		90		352		7,248		—		8,554
Substandard		294		570		483		901		60		1,230		4,493		—		8,031
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	21,975	$	27,716	$	15,001	$	6,919	$	4,207	$	10,122	$	57,287	$	—	$	143,227
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Pass	$	20,649	$	36,877	$	57,330	$	14,776	$	19,773	$	24,035	$	695	$	—	$	174,135
Special Mention		213		465		652		398		—		2,688		—		—		4,416
Substandard		—		—		902		—		471		8,986		—		—		10,359
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	20,862	$	37,342	$	58,884	$	15,174	$	20,244	$	35,709	$	695	$	—	$	188,910
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial lessors of buildings:
Pass	$	13,317	$	22,938	$	15,821	$	6,516	$	3,594	$	9,202	$	381	$	—	$	71,769
Special Mention		—		446		1,513		—		3,627		—		—		—		5,586
Substandard		—		—		—		999		—		166		—		—		1,165
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	13,317	$	23,384	$	17,334	$	7,515	$	7,221	$	9,368	$	381	$	—	$	78,520
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction:
Pass	$	16,348	$	19,495	$	599	$	275	$	288	$	269	$	—	$	—	$	37,274
Special Mention		—		289		6		635		—		—		—		—		930
Substandard		—		—		—		33		80		—		—		—		113
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	16,348	$	19,784	$	605	$	943	$	368	$	269	$	—	$	—	$	38,317
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total
Pass	$	71,979	$	106,437	$	87,617	$	27,407	$	27,712	$	42,046	$	46,622	$	—	$	409,820
Special Mention		229		1,219		2,822		1,211		3,717		3,040		7,248		—		19,486
Substandard		294		570		1,385		1,933		611		10,382		4,493		—		19,668
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	72,502	$	108,226	$	91,824	$	30,551	$	32,040	$	55,468	$	58,363	$	—	$	448,974

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
December 31, 2022
Commercial and industrial	$	119,353	$	282	$	7,927	$	—	$	1,781	$	129,343
Commercial real estate		220,414		485		8,352		—		2,534		231,785
Construction & land development		40,640		6,655		—		—		8,023		55,318
Total	$	380,407	$	7,422	$	16,279	$	—	$	12,338	$	416,446

22

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

The Company monitors the credit risk profile by payment activity for the loan classes listed below. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. The following table presents the amortized cost in residential consumer loans based on payment activity:

	Term Loans Amortized Costs Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior						Total
September 30, 2023
Consumer mortgage:
Performing	$	19,430	$	35,098	$	38,086	$	33,815	$	9,080	$	31,800	$	—	$	—	$	167,309
Nonperforming		—		—		—		—		—		110		—		—		110
Total	$	19,430	$	35,098	$	38,086	$	33,815	$	9,080	$	31,910	$	—	$	—	$	167,419
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction
Performing	$	3,422	$	1,736	$	270	$	576	$	83	$	42	$	—	$	—	$	6,129
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	3,422	$	1,736	$	270	$	576	$	83	$	42	$	—	$	—	$	6,129
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home equity line of credit:
Performing	$	—	$	—	$	—	$	—	$	—	$	—	$	41,046	$	47	$	41,093
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	41,046	$	47	$	41,093
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer installment:
Performing	$	5,410	$	3,476	$	1,187	$	603	$	211	$	208	$	74	$	—	$	11,169
Nonperforming		—		1		17		—		10		—		—		—		28
Total	$	5,410	$	3,477	$	1,204	$	603	$	221	$	208	$	74	$	—	$	11,197
YTD gross charge-offs	$	1	$	11	$	10	$	3	$	2	$	4	$	—	$	—	$	31
Consumer indirect:
Performing	$	760	$	1,219	$	636	$	589	$	643	$	2,295	$	—	$	—	$	6,142
Nonperforming		—		—		—		—		21		5		—		—		26
Total	$	760	$	1,219	$	636	$	589	$	664	$	2,300	$	—	$	—	$	6,168
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	66	$	—	$	—	$	66
Total
Performing	$	29,022	$	41,529	$	40,179	$	35,583	$	10,017	$	34,345	$	41,120	$	47	$	231,842
Nonperforming		—		1		17		—		31		115		—		—		164
Total	$	29,022	$	41,530	$	40,196	$	35,583	$	10,048	$	34,460	$	41,120	$	47	$	232,006

Consumer mortgages are substantially secured by one to four family owner occupied properties and consumer indirect loans are substantially secured by recreational vehicles. All nonperforming consumer loans are evaluated when placed on nonaccrual status and may be charged down based on the fair value less cost to sell if that value is lower than the outstanding balance.

Modifications to Borrowers Experiencing Financial Difficulty

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

In some cases, the Bank may provide multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

There were no modifications of loans to borrowers in financial distress completed during the nine months ended September 30, 2023.

23

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

Impaired Loans

The following impaired loan information relates to required disclosures under the previous incurred loan loss methodology and are only presented with prior period information.

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio class, based on the impairment method as of December 31, 2022:

(Dollars in thousands)	Commercial and industrial		Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total
December 31, 2022
Allowance for loan losses:
Individually evaluated for    impairment	$	—	$	—	$	—	$	—	$	4	$	—	$	4
Collectively evaluated for    impairment		1,110		2,760		1,268		803		229		664		6,834
Total ending allowance balance	$	1,110	$	2,760	$	1,268	$	803	$	233	$	664	$	6,838
Loans:
Loans individually    evaluated for    impairment	$	123	$	113	$	677	$	—	$	123			$	1,036
Loans collectively    evaluated for    impairment		129,220		231,672		193,448		55,318		16,264				625,922
Total ending loans balance	$	129,343	$	231,785	$	194,125	$	55,318	$	16,387			$	626,958

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2022:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total recorded investment1		Related Allowance
December 31, 2022
Commercial and industrial	$	123	$	124	$	—	$	124	$	—
Commercial real estate		117		92		20		112		—
Residential real estate		733		166		518		683		—
Construction & land development		—		—		—		—		—
Consumer		127		6		121		127		4
Total impaired loans	$	1,101	$	387	$	659	$	1,046	$	4

1Includes principal, accrued interest, unearned fees, and origination costs

24

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated.

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
(Dollars in thousands)	2022		2022
Average recorded investment:
Commercial and industrial	$	255	$	258
Commercial real estate		173		198
Residential real estate		715		781
Construction & land development		—		164
Consumer		131		132
Average recorded investment in impaired loans	$	1,274	$	1,533
Interest income recognized:
Commercial and industrial	$	—	$	2
Commercial real estate		2		6
Residential real estate		7		23
Construction & land development		—		—
Consumer		2		6
Interest income recognized on a cash basis on impaired loans	$	11	$	37

25

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 4 – SHORT-TERM BORROWINGS

The following table provides additional detail regarding repurchase agreements and the related collateral accounted for as secured borrowings.

	Remaining Contractual Maturity Overnight and Continuous
	September 30,		December 31,
(Dollars in thousands)	2023		2022
Securities of U.S. Government Agencies and mortgage-backed securities of    government agencies pledged, fair value	$	30,911	$	32,755
Repurchase agreements		30,734		32,550

NOTE 5 – FAIR VALUE MEASUREMENTS

The Company provides disclosures about assets and liabilities carried at fair value. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. The three broad levels of the fair value hierarchy are described below:

Level I:	Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level II:	Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by corroborated or other means. If the asset or liability has a specified (contractual) term, the Level II input must be observable for substantially the full term of the asset or liability.
Level III:	Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

26

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5 – FAIR VALUE MEASUREMENTS (CONTINUED)

The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of September 30, 2023 and December 31, 2022 by level within the fair value hierarchy. No liabilities are carried at fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Equity securities with readily determinable values and U.S. Treasury Notes are valued at the closing price reported on the active market on which the individual securities are traded. Obligations of U.S. government agencies, mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions and corporate bonds are valued at observable market data for similar assets. Equity securities without readily determinable values are carried at amortized cost adjusted for impairment and observable price changes and are not included in the table below.

(Dollars in thousands)	Level I		Level II		Level III		Total
September 30, 2023
Assets:
Securities available-for-sale
U.S. Treasury securities	$	22,458	$	—	$	—	$	22,458
U.S. Government agencies		—		12,848		—		12,848
Mortgage-backed securities of government agencies		—		64,451		—		64,451
Asset-backed securities of government agencies		—		552		—		552
State and political subdivisions		—		18,799		—		18,799
Corporate bonds		—		26,222		—		26,222
Total available-for-sale securities	$	22,458	$	122,872	$	—	$	145,330
Equity securities	$	211	$	—	$	—	$	211
December 31, 2022
Assets:
Securities available-for-sale
U.S. Treasury securities	$	22,225	$	—	$	—	$	22,225
U.S. Government agencies		—		12,630		—		12,630
Mortgage-backed securities of government agencies		—		68,890		—		68,890
Asset-backed securities of government agencies		—		618		—		618
State and political subdivisions		—		19,477		—		19,477
Corporate bonds		—		26,229		—		26,229
Total available-for-sale securities	$	22,225	$	127,844	$	—	$	150,069
Equity securities	$	198	$	—	$	—	$	198

There were no assets measured on a nonrecurring basis on September 30, 2023, and December 31, 2022.

27

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 6 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The estimated fair values of recognized financial instruments carried at amortized cost as of September 30, 2023 and December 31, 2022 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
September 30, 2023
Financial assets
Securities held-to-maturity	$	230,505	$	9,209	$	178,486	$	—	$	187,695
Loans held for sale		—		—		—		—		—
Net loans		674,258		—		—		640,671		640,671
Mortgage servicing rights		601		—		—		601		601
Financial liabilities
Deposits	$	1,018,075	$	840,637	$	—	$	179,008	$	1,019,645
Other borrowings		1,808		—		—		1,687		1,687
December 31, 2022
Financial assets
Securities held-to-maturity	$	247,401	$	11,617	$	200,337	$	—	$	211,954
Loans held for sale		52		55		—		—		55
Net loans		620,333		—		—		600,720		600,720
Mortgage servicing rights		621		—		—		621		621
Financial liabilities
Deposits	$	1,023,417	$	905,335	$	—	$	114,478	$	1,019,813
Other borrowings		2,461		—		—		2,321		2,321

Other financial instruments carried at amortized cost include cash and cash equivalents, restricted stock, bank-owned life insurance, accrued interest receivable, short-term borrowings, and accrued interest payable, all of which have a Level I fair value that approximates their carrying value. The Company also has unrecognized financial instruments on September 30, 2023 and December 31, 2022. These financial instruments relate to commitments to extend credit and letters of credit. The aggregate contract amount of such financial instruments was approximately $301 million on September 30, 2023 and $268 million on December 31, 2022. Such amounts are also considered to be the fair values.

The fair value estimates of financial instruments are made at a specific point in time based on relevant market information. Since no ready market exists for a significant portion of the financial instruments, fair value estimates are largely based on judgments after considering such factors as future expected credit losses, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

28

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 7- ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in accumulated other comprehensive loss by component net of tax for the three and nine months ended September 30, 2023 and 2022:

(Dollars in thousands)	Pretax			Tax Effect			After-tax
Three Months Ended September 30, 2023
Balance, beginning of period	$	(16,856	)	$	3,540		$	(13,316	)
Unrealized holding loss on available-for-sale securities arising during    the period		(1,127	)		237			(890	)
Amortization of held-to-maturity discount resulting from transfer		50			(11	)		40
Total other comprehensive loss		(1,077	)		226			(851	)
Balance, end of period	$	(17,933	)	$	3,766		$	(14,167	)
Nine Months Ended September 30, 2023
Balance, beginning of period	$	(16,354	)	$	3,435		$	(12,919	)
Unrealized holding loss on available-for-sale securities arising during    the period		(1,722	)		361			(1,361	)
Amortization of held-to-maturity discount resulting from transfer		143			(30	)		113
Total other comprehensive loss		(1,579	)		331			(1,248	)
Balance, end of period	$	(17,933	)	$	3,766		$	(14,167	)
Three Months ended September 30, 2022
Balance, beginning of period	$	(12,663	)	$	2,660		$	(10,003	)
Unrealized holding loss on available-for-sale securities arising during    the period		(5,189	)		1,090			(4,099	)
Amortization of held-to-maturity discount resulting from transfer		64			(14	)		50
Total other comprehensive loss		(5,125	)		1,076			(4,049	)
Balance, end of period	$	(17,788	)	$	3,736		$	(14,052	)
Nine Months Ended September 30, 2022
Balance, beginning of period	$	(2,691	)	$	566		$	(2,125	)
Unrealized holding loss on available-for-sale securities arising during    the period		(15,334	)		3,220			(12,114	)
Amortization of held-to-maturity discount resulting from transfer		237			(50	)		187
Total other comprehensive loss		(15,097	)		3,170			(11,927	)
Balance, end of period	$	(17,788	)	$	3,736		$	(14,052	)

29

CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis focuses on the consolidated financial condition of the Company on September 30, 2023 as compared to December 31, 2022, and the consolidated results of operations for the three and nine months ended September 30, 2023 compared to the same periods in 2022. The purpose of this discussion is to provide the reader with a more thorough understanding of the Consolidated Financial Statements. This discussion should be read in conjunction with the interim condensed Consolidated Financial Statements and related footnotes contained in Part I, Item 1 of this Quarterly Report.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report are not historical facts but rather are forward-looking statements that are subject to certain risks and uncertainties. When used herein, the terms “anticipates”, “plans”, “expects”, “believes”, and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company’s actual results, performance or achievements may materially differ from those expressed or implied in the forward-looking statements. Risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, general economic conditions, interest rate environment, competitive conditions in the financial services industry, changes in law, governmental policies and regulations, and rapidly changing technology affecting financial services. Other factors not currently anticipated may also materially and adversely affect the Company’s results of operations, cash flows, and financial position. There can be no assurance that future results will meet expectations. While the Company believes that the forward-looking statements in this report are reasonable, the reader should not place undue reliance on any forward-looking statement.

The Company does not undertake, and specifically disclaims any obligation, to publicly revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by applicable law.

FINANCIAL CONDITION

Total assets decreased $2.5 million to $1.157 billion at September 30, 2023 compared to $1.159 billion December 31, 2022. During the nine months ended September 30, 2023, securities decreased $24 million, net loans increased $54 million, and cash and cash equivalents decreased $37 million. Deposits and short-term borrowings decreased $7 million.

Net loans increased $54 million, or 9%, as residential real estate loans increased $18 million, or 12%, from December 31, 2022. Commercial and commercial real estate loans increased $39 million, or 10% compared to December 31, 2022. Consumer refinance activity slowed significantly on mortgage loans, home purchase activity remained stable despite limited inventory, and home equity line balances decreased by $3 million. Residential mortgage loan originations for the nine months ended September 30, 2023 totaled $40 million, a decrease from $61 million in originations during the nine months ended September 30, 2022. As interest rates continued to rise in 2023, more variable rate residential mortgage loans were originated for the portfolio. Originations sold into the secondary market were $3 million and $8 million, respectively during the nine months ended September 30, 2023 and September 30, 2022. The Bank originates and sells primarily fixed rate thirty-year mortgages into the secondary market.

The allowance for credit losses decreased $317 thousand from the year ago quarter to $6.7 million. The Company adopted CECL on January 1, 2023. Net recoveries were $119 thousand, or an annualized (0.07)% of average loans, in the current nine-month period compared to net charge-offs of $10 thousand, or 0.01% of average loans in the year-ago nine-month period. At September 30, 2023, the allowance for credit losses to total loans was 0.98%. We believe the allowance level is appropriate given the low level of problem loans and composition of the overall loan portfolio in the current economic environment.

30

CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Nonperforming loans increased $4 thousand to $260 thousand, or 0.04%, of total loans from $256 thousand, or 0.04% of total loans, on December 31, 2022. For the nine months ended September 30, 2023, $125 thousand in loans were placed on nonaccrual status, $99 thousand in paydowns were received, and $34 thousand in personal loans were charged-off due to non-payment.

	September 30,			December 31,			September 30,
(Dollars in thousands)	2023			2022			2022
Non-performing loans	$	260		$	256		$	686
Other real estate		—			—			—
Repossessed assets		—			—			—
Allowance for credit/loan losses		6,691			6,838			7,008
Total loans	$	680,949		$	627,171		$	609,971
Allowance for credit/loan losses as a percentage of total loans		0.98	%		1.09	%		1.15	%
Allowance for credit/loan losses to total nonperforming loans	25.8X			26.7X			10.2X

The ratio of gross loans to deposits was 66.9% at September 30, 2023, compared to 61.3% at December 31, 2022.

The Company has no exposure to government-sponsored enterprise preferred stocks, collateralized debt obligations, or trust preferred securities. Management has considered industry analyst reports, sector credit reports, and the volatility within the bond market in concluding that the gross unrealized losses of $59.2 million within the available-for-sale and held-to-maturity portfolios as of September 30, 2023, was primarily the result of current market yields compared to the yields at the time the investments were purchased by the Company and not due to credit quality. As a result, all embedded security losses on September 30, 2023, are considered temporary and no allowance for credit loss is necessary.

The weighted average life of total debt securities was 5.22 years at September 30, 2023 as compared to 5.57 years at December 31, 2022. If interest rates declined 100 basis points, the weighted average life was estimated to fall to 5.17 years at September 30, 2023 and 5.10 years at December 31, 2022. If interest rates rose 100 basis points the weighted average life would be expected to increase to 5.22 years at September 30, 2023 and 6.01 years at December 31, 2022.

Deposits decreased $5 million, or less than 1%, from December 31, 2022 with noninterest-bearing deposits decreasing approximately $50 million, or 14%, and interest-bearing deposit accounts increasing approximately $45 million, or 7%. Total deposits as of September 30, 2023 are $1.02 billion, or 1%, below September 30, 2022 deposit balances. On a year over year comparison, decreases were recognized in noninterest-bearing demand deposits of $38 million, savings of $28 million and money market accounts of $18 million. Increases were recognized in interest bearing demand accounts of $11 million, and time deposits of $61 million. Deposits have declined somewhat as customers use excess liquid funds and move funds into time certificates of deposit to take advantage of the increased interest rates. The estimated amount of uninsured deposits was $267 million, $267 million, and $286 million as of September 30, 2023, December 31, 2022, and September 30, 2022, respectively.

Short-term borrowings consisting of overnight repurchase agreements with retail customers decreased $2 million, or 6%, to $31 million at September 30, 2023 as compared to December 31, 2022 and other borrowings decreased $653 thousand as the Company repaid FHLB advances.

Total shareholders’ equity amounted to $101 million, or 8.8%, of total assets at September 30, 2023, an increase of $5 million, or 6%, from $96 million December 31, 2022. The increase in shareholders’ equity during the nine months ended September 30, 2023 was due to net income of $11.1 million, accumulated other comprehensive loss (“AOCL”) of $1.2 million, less cash dividends of $3.0 million, and treasury stock repurchase of $1.4 million. An increase of U.S. Treasury rates during the nine months ended September 30, 2023 caused the AOCL to increase as AFS securities are marked to fair market value. As interest rates increase, the fair value of AFS fixed-rate securities decrease with a corresponding net of tax increase recorded in the AOCL portion of equity. This remaining unrealized loss in securities is temporary and is adjusted monthly for additional interest rate fluctuations, principal paydowns, calls, and maturities. The Company and the Bank met all regulatory capital requirements at September 30, 2023 as shown in the Capital Resources section of this report.

31

CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Three months ended September 30, 2023 and 2022

For the quarters ended September 30, 2023 and 2022, the Company recorded net income of $3.5 million and $3.7 million and $1.30 and $1.35 per share, respectively. The $169 thousand decrease in net income for the period was primarily the result of the provision for credit losses of $177 thousand compared to the recovery for credit losses in the prior year period of $250 thousand. The increase of $277 thousand in net interest income and $30 thousand increase in noninterest income was offset by an increase in noninterest expenses of $89 thousand. The federal income tax provision decreased $40 thousand. Return on average assets and return on average equity were 1.19% and 13.63%, respectively, for the three-month period of 2023, compared to 1.25% and 15.24%, respectively for the same quarter in 2022.

Average Balance Sheets and Net Interest Margin Analysis

	For the Three Months Ended September 30,
	2023								2022
(Dollars in thousands)	Average balance1		Interest			Average rate2			Average balance1		Interest			Average rate2
ASSETS
Interest-earning deposits	$	38,669	$	531			5.45	%	$	101,460	$	586			2.29	%
Taxable securities		360,868		1,910			2.10			373,290		1,780			1.89
Tax-exempt securities 4		21,859		130			2.36			24,627		139			2.24
Loans 3,4		675,283		9,181			5.39			594,820		6,687			4.46
Total interest-earning assets		1,096,679		11,752			4.25	%		1,094,197		9,192			3.33	%
Noninterest-earning assets		65,350								65,326
TOTAL ASSETS	$	1,162,029							$	1,159,523
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing demand deposits	$	256,223	$	689			1.07	%	$	243,343	$	151			0.25	%
Savings deposits		292,706		662			0.90			323,033		183			0.22
Time deposits		169,766		1,420			3.32			115,899		225			0.77
Borrowed funds		35,618		110			1.23			37,479		37			0.39
Total interest-bearing liabilities		754,313		2,881			1.52	%		719,754		596			0.33	%
Noninterest-bearing demand deposits		301,440								340,576
Other liabilities		4,982								4,150
Shareholders' Equity		101,294								95,043
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,162,029							$	1,159,523
Taxable equivalent net interest    income, (Non-GAAP)			$	8,871							$	8,596
Tax equivalent adjustment 4				(34	)							(36	)
Net interest income, (GAAP)			$	8,837							$	8,560
Net interest margin, (GAAP)							3.20	%							3.10	%
Tax equivalent adjustment 4							0.01								0.02
Net interest margin-taxable equivalent, (Non-GAAP)							3.21	%							3.12	%
Taxable equivalent net interest spread							2.73	%							3.00	%

1 Average balances have been computed on an average daily basis.

2 Average rates have been computed based on the amortized cost of the corresponding asset or liability.

3 Average loan balances include nonaccrual loans.

4 Interest income is shown on a fully tax-equivalent basis, which is a Non-GAAP measure and is reconciled to the GAAP measure at the bottom of the table.

32

CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Interest income for the quarter ended September 30, 2023, was $11.7 million representing a $2.6 million increase, or 22%, compared to the same period in 2022. This increase was primarily due to increased volume and rates on loans and increased rates on interest-earning deposits, and taxable securities partially offset by the volume decrease in interest-earning deposits in the comparable period. Average interest-earning deposit rates increased 316 basis points while loan rates increased 93 basis points, and taxable securities interest rates rose 21 basis points for the quarter ended September 30, 2023 as compared to the same period in 2022. The Federal Reserve raised managed interest rates 6 times and 225 basis points during the 1 year period. Interest expense for the quarter ended September 30, 2023 was $2.9 million, an increase of $2.3 million, or 383%, from the same quarter in 2022. The increase in interest expense occurred primarily due to the increase in interest rates on all deposit types as well as an increase in volume of demand and time deposit accounts for the quarter ended September 30, 2023.

For the quarter ended September 30, 2023, with improving credit quality and minimal loan charge-offs, the bank recognized net recoveries of $119 thousand, compared to $10 thousand net charge-offs for the same quarter in 2022. The provision for credit losses for loans in the current quarter of $13 thousand, compared to a credit provision of $250 thousand in the third quarter 2022, reflects loan growth in 2023. The company recorded $164 thousand credit provision for off-balance credit exposure in 2023 compared to a $0 provision in the third quarter of 2022. This increase results from an increase primarily in commercial construction loans in 2023 compared to 2022. Economic indicators reflect a leveling off in residential real estate prices and low unemployment. The provision for credit losses is determined based on management’s calculation of the adequacy of the allowance for credit losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data, including past charge-offs and current economic trends.

Noninterest income for the quarter ended September 30, 2023, was $1.7 million, an increase of $30 thousand, or 2%, compared to the same quarter in 2022. The gain on the sale of mortgage loans into the secondary market decreased by $2 thousand, or 4%, for the quarter ended September 30, 2023 as fewer loans were sold into the secondary market due to decreasing demand for mortgage refinancing as interest rates increased and inventories of homes available for sale declined. Fees from trust and brokerage services amounted to $259 thousand for the third quarter 2023, an increase of $43 thousand, or 20%, as compared to the same quarter in 2022. Service charges on deposit accounts increased $11 thousand, or 3%, compared to the same quarter in 2022, primarily from increased customer fees, partially offset by a decline in customer overdraft fees.. Debit card interchange income decreased $5 thousand, or less than 1%, with less fees generated from usage in the third quarter 2023. Credit card fee income decreased $4 thousand, or 2%. Earnings on bank owned life insurance increased $9 thousand, or 5%, for the third quarter 2023.

Noninterest expenses for the quarter ended September 30, 2023 increased $89 thousand, or 2%, compared to the third quarter 2022. Salaries and employee benefits increased $230 thousand, or 7%, a result increases in headcount and base salary compared to third quarter 2022. Occupancy and equipment expense increased $24 thousand, or 5%, in 2023 over the third quarter 2022, primarily due to increases in rooftop air conditioner repair. Software expense increased $11 thousand due to additional software purchases over third quarter 2022. Professional and director fees decreased $189 thousand, or 34%, for the quarter ended September 30, 2023 as compared to the third quarter 2022, primarily reflecting a consulting fee in 2022 to renegotiate the core data processing software contract. Marketing and public relations expense decreased $17 thousand, or 12%. Data line and phone expense increased $2 thousand, or 4%, as renegotiated contracts have stabilized. Debit card expense decreased $22 thousand or 11%. FDIC insurance expense increased $38 thousand, or 41%, with the increase in insurance rates. Federal income tax expense decreased $40 thousand, or 4%, for the quarter ended September 30, 2023 as compared to the third quarter 2022. The provision for income taxes was $850 thousand (effective rate of 18.2%) for the quarter ended September 30, 2023, compared to $890 thousand (effective rate of 19.6%) for the same quarter ended 2022.

33

CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Nine months ended September 30, 2023, and 2022

For the nine months ended September 30, 2023, and 2022, the Company recorded net income of $11.1 million and $9.6 million and $4.12 and $3.52 per share, respectively. The $1.5 million increase in net income for the nine-month period was primarily the result of an increase in net interest income of $3.7 million, which was partially offset by an increase in the total provision for credit losses of $1.2 million, an increase in noninterest expenses of $615 thousand, and a reduction in noninterest income of $33 thousand. The federal income tax provision was $413 thousand higher during the nine-month period in 2023. Return on average assets and return on average equity were 1.28% and 14.85%, respectively, for the nine months ended September 30, 2023, compared to 1.12% and 13.41%, respectively for the same period in 2022.

	For the Nine Months Ended September 30,
	2023								2022
(Dollars in thousands)	Average balance1		Interest			Average rate2			Average balance1		Interest			Average rate2
ASSETS
Interest-earning deposits	$	40,272	$	1,520			5.05	%	$	119,373	$	863			0.97	%
Taxable securities		368,510		5,867			2.13			360,774		4,721			1.75
Tax-exempt securities 4		22,045		387			2.35			24,705		416			2.25
Loans 3,4		657,698		25,874			5.26			576,821		18,510			4.29
Total interest-earning assets		1,088,525		33,648			4.13	%		1,081,673		24,510			3.03	%
Noninterest-earning assets		65,024								63,217
TOTAL ASSETS	$	1,153,549							$	1,144,890
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing demand deposits	$	247,530	$	1,810			0.98	%	$	239,679	$	257			0.14	%
Savings deposits		303,250		1,784			0.79			313,172		325			0.14
Time deposits		144,539		2,890			2.67			117,999		670			0.76
Borrowed funds		34,289		267			1.04			41,032		94			0.31
Total interest-bearing liabilities		729,608		6,751			1.24	%		711,882		1,346			0.25	%
Noninterest-bearing demand deposits		319,218								333,715
Other liabilities		5,185								3,956
Shareholders' Equity		99,538								95,337
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,153,549							$	1,144,890
Taxable equivalent net interest    income, (Non-GAAP)			$	26,897							$	23,164
Tax equivalent adjustment 4				(101	)							(109	)
Net interest income, (GAAP)			$	26,796							$	23,055
Net interest margin, (GAAP)							3.29	%							2.85	%
Tax equivalent adjustment 4							0.01								0.01
Net interest margin-taxable equivalent, (Non-GAAP)							3.30	%							2.86	%
Taxable equivalent net interest spread							2.89	%							2.78	%

34

CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Interest income for the nine months ended September 30, 2023, was $33.5 million representing a $9.1 million increase, or 37%, compared to the same period in 2022. This increase was primarily due to volume and yield increases on loans and taxable securities along with rate increases on interest-earning deposits in other banks for the period ended September 30, 2023, as compared to the same period in 2022. Interest expense for the nine months ended September 30, 2023, was $6.8 million, an increase of $5.4 million, or 402%, from the same period in 2022. The increase in interest expense occurred primarily due to an increase in rates on all interest-bearing liabilities for the nine months ended September 30, 2023, as well as a shift in balances into higher rate time deposits.

For the nine months ended September 30, 2023, the provision for credit losses was $287 thousand, compared to a credit reversal of $895 thousand for the same period in 2022. For more discussion see Results of Operations, three months. The provision for loan losses is determined based on management’s calculation of the adequacy of the allowance for credit losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data, including past charge-offs and current economic trends.

Noninterest income for the nine months ended September 30, 2023, was $5.1 million, a decrease of $33 thousand, or less than 1%, compared to the same period in 2022. The gain on the sale of mortgage loans to the secondary market decreased $208 thousand to $106 thousand for the nine months ended September 30, 2023, as increases in interest rates slowed mortgage loan refinancing. Service charges on deposit accounts increased $49 thousand, or 6%, compared to the same period in 2022 primarily from increases in business service charges on deposit accounts and customer nsf fees. Credit card fee income increased $19 thousand, or 4% with growth in business credit card customers and interchange income. Debit card interchange income increased $11 thousand, or less than 1%. Earnings on bank owned life insurance policies increased $16 thousand for the period. Fees from trust and brokerage services increased $36 thousand for the period.

Noninterest expenses for the nine months ended September 30, 2023, increased $615 thousand, or 4%, compared to the same period in 2022. Salaries and employee benefits increased $346 thousand, or 4%, a result of increased salaries and medical benefits. Software increased $172 thousand, or 16%, with investment in enhanced reporting software. FDIC assessment rose $129 thousand, or 51%, a result of increasing rates set by the FDIC in 2002 for 2023. Marketing and public relations expense increased $21 thousand, or 6%, with marketing, brand recognition initiatives, and community support in the company’s market slowly increasing in volume due to increasing opportunities presenting after previous cancellations due to COVID-19. Occupancy and equipment expenses increased $27 thousand over the same period in 2022 with an increase in maintenance expense. Professional and director fees decreased $88 thousand for the nine months ended September 30, 2023, as compared to the same period in 2022 as an IT consulting fee did not recur in 2023 which was partially offset with increases in audit function and CECL.

Federal income tax expense increased $413 thousand, or 18%, for the nine months ended September 30, 2023, as compared to the same period in 2022. The provision for income taxes was $2.7 million (effective rate of 19.7%) for the nine months ended September 30, 2023, compared to $2.3 million (effective rate of 19.4%) for the same period ended 2022.

35

CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAPITAL RESOURCES

The Company maintained a strong capital position with tangible common equity to tangible assets of 8.4% at September 30, 2023 compared with 7.9% at December 31, 2022.

Consistent with the Board of Director’s commitment to public confidence and safe and sound banking operations, capital targets and minimum risk-based capital ratios for CSB were established to maintain excess capital to well-capitalized standards. To be considered well-capitalized, an institution must have a total risk-based capital ratio of at least 10%, a tier 1 capital ratio of at least 8%, a leverage capital ratio of at least 5%, a common equity tier 1 (“CET1”) ratio of at least 6.5% and must not be subject to any order or directive requiring the institution to improve its capital level. An adequately capitalized institution has a total risk-based capital ratio of at least 8%, a tier 1 capital ratio of at least 6%, a CET1 ratio of at least 4.5%, and a leverage ratio of at least 4%.

Failure to meet specified minimum capital requirements could result in regulatory actions by the Federal Reserve or Ohio Division of Financial Institutions that could have a material effect on the Company’s financial condition or results of operations. Management believes there were no material changes to capital resources as presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. As of September 30, 2023, the Company and the Bank met all capital adequacy requirements to which they were subject.

	Capital Ratios
	September 30, 2023			December 31, 2022
Total Capital To Risk Weighted Assets Ratio
Consolidated		16.1	%		16.0	%
Bank		16.0			15.9
Tier 1 Capital To Risk Weighted Assets Ratio
Consolidated		15.1			15.1
Bank		15.1			14.9
Common Equity Tier 1 Capital To Risk Weighted Assets
Consolidated		15.1			15.1
Bank		15.1			14.9
Tier 1 Leverage Ratio
Consolidated		9.5			8.8
Bank		9.4			8.7

LIQUIDITY

(Dollars in thousands)	September 30, 2023			December 31, 2022			Change
Cash and cash equivalents	$	49,409		$	86,420		$	(37,011	)
Available from FHLB		124,045			122,062			1,983
Unpledged AFS securities at fair market value		123,340			134,401			(11,061	)
	$	296,794		$	342,883		$	(46,089	)
Net deposits and short-term liabilities	$	1,027,414		$	1,041,016		$	(13,602	)
Liquidity ratio		28.9	%		32.9	%		(4.0	)
Minimum board approved liquidity ratio		20.0	%		20.0	%

Liquidity refers to the Company’s ability to generate sufficient cash to fund current loan demand, meet deposit withdrawals, pay operating expenses, and meet other obligations. Liquidity is monitored by the Company’s Asset Liability Committee. Other sources of liquidity include, but are not limited to, purchases of federal funds, advances from the FHLB, adjustments of interest rates to attract deposits, brokered deposits, and borrowing at the Federal Reserve discount window. Management believes that its sources of liquidity are adequate to meet cash flow obligations for the foreseeable future.

36

CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements (as such term is defined in applicable Securities and Exchange Commission (the “Commission”) rules) that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.

PER SHARE DATA

Earnings per share is computed based on the weighted average number of shares of common stock outstanding during each year. The company currently maintains a simple capital structure, thus, there are no dilutive effects on earnings per share.

The weighted average number of common shares outstanding for earnings per share computations was as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands, except per share data)	2023		2022		2023		2022
Net income	$	3,481	$	3,650	$	11,059	$	9,560
Weighted average common shares outstanding		2,675,967		2,712,686		2,682,872		2,716,225
Earnings per share, basic and diluted		1.30		1.35		4.12		3.52

37

CSB BANCORP, INC.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

By September 2023, Ohio's unemployment rate had stabilized at 3.4%. The bank based in Holmes County is reporting an unemployment rate of 2.5% in September 2023. Of the counties within the bank's footprint, Stark County reported the highest unemployment rate at 3.5% in September. Tuscarawas and Wayne Counties posted a lower unemployment rates of 3.2% and 2.7% in September 2023. Many jobs within the Bank's market footprint continue to go unfilled. The rate of inflation, increased to 3.7% on a year over year basis at September 2023, following a high base rate in 2022. The rate continues to be above the Federal Reserve target rate of 2%, but has fallen from 8.5% in March 2022. The Federal Reserve continues to raise interest rates in an effort to stabilize prices with maximum employment. Credit quality in the Bank's loan portfolio is good, however risks to the economy remain with higher prices for goods and labor.

Management performs a quarterly analysis of the Company’s interest rate risk over a twenty-four-month horizon. The analysis includes two balance sheet models, one based on a static balance sheet and one on a dynamic balance sheet with projected growth in assets and liabilities. All balance sheet positions, and interest rate projections are currently within the Company’s board-approved policy for both the twelve- month and twenty-four-month periods.

The following table presents an analysis of the estimated sensitivity of the Company’s annual net interest income to sudden and sustained -400 through +400 basis point changes, in 100 basis point increments, in market interest rates at September 30, 2023 and December 31, 2022. The net interest income reflected is for the first twelve-month period of the modeled twenty-four-month horizon. The underlying balance sheet for illustrative purposes is dynamic with projected growth in assets and liabilities.

September 30, 2023
(Dollars in thousands)
Change in Interest Rates (basis points)		Net Interest Income		Dollar Change			Percentage Change				Board Policy Limits
+400		$	37,686	$	537			1.4		%	± 25	%
+300			37,640		491			1.3			± 15
+200			37,495		346			0.9			± 10
+100			37,324		175			0.5			± 5
0			37,149		—			—
-100			36,701		(448	)		(1.2	)		± 5
-200			35,696		(1,453	)		(3.9	)		± 10
-300			34,841		(2,308	)		(6.2	)		± 15
-400			33,673		(3,476	)		(9.4	)		± 25
December 31, 2022
+ 400		$	38,810	$	1,090			2.9		%	± 25	%
+ 300			38,581		861			2.3			± 15
+ 200			38,302		582			1.5			± 10
+ 100			38,003		283			0.8			± 5
	0		37,720		—			—
– 100			37,368		(352	)		(0.9	)		± 5
– 200			36,869		(851	)		(2.3	)		± 10
– 300			35,973		(1,747	)		(4.6	)		± 15
– 400			35,519		(2,201	)		(5.8	)		± 25

38

CSB BANCORP, INC.

CONTROLS AND PROCEDURES

ITEM 4 - CONTROLS AND PROCEDURES

With the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that:

(a)information required to be disclosed by the Company in this Quarterly Report on Form 10-Q would be accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure;

(b)information required to be disclosed by the Company in this Quarterly Report on Form 10-Q would be recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms; and

(c)the Company’s disclosure controls and procedures are effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that material information relating to the Company and its consolidated subsidiary is made known to them, particularly during the period for which the Company’s periodic reports, including this Quarterly Report on Form 10-Q, are being prepared.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes during the period covered by this Quarterly Report on Form 10-Q in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

39

CSB BANCORP, INC.

FORM 10-Q

Quarter ended September 30, 2023

PART II – OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS.

In the opinion of management there are no outstanding legal proceedings that are reasonably likely to have a material adverse effect on the company’s financial condition or results of operations.

ITEM 1A - RISK FACTORS.

Not required for Smaller Reporting Companies.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(a)Not applicable

(b)Not applicable

(c)The following table provides information about repurchases of common stock by the Company during the quarter ended September 30, 2023:

Period	Total Number of Common Shares Purchased		Average Price Paid per Common Share			Total Number of Shares Purchased as Part of Publicly Announced Authorization		Maximum Number of Remaining Shares that May be Purchased as Part of Publicly Announced Authorization
July 1, 2023 - July 31, 2023		—		—			—		75,093
August 1, 2023 - August 31, 2023		8,880		37.60			8,880		66,213
September 1, 2023 - September 30, 2023		132		36.26			132		66,081
Total for quarter		9,012		73.86	—		9,012		66,081

On March 2, 2021, CSB Bancorp, Inc. filed Form 8-K with the Commission announcing that its Board of Directors approved a Stock Repurchase Program authorizing the repurchase of up to 5% of the Company’s common shares or 137,117 of the Company’s outstanding shares. Repurchases may be made from time to time as market and business conditions warrant, in the open market, through block purchases, and in negotiated private transactions.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4 - MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5 - OTHER INFORMATION.

Not applicable.

40

CSB BANCORP, INC.

FORM 10-Q

Quarter ended September 30, 2023

PART II – OTHER INFORMATION

ITEM 6 - Exhibits.

Exhibit Number	Description of Document
3.1	Amended Articles of Incorporation of CSB Bancorp, Inc. (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q filed August 6, 2004, Exhibit 3.1, film number 04958544).
3.1.1	Amended form of Article Fourth of Amended Articles of Incorporation, as effective April 9, 1998 (incorporated by reference to registrant’s Annual Report on Form 10-K filed on March 30, 1999, Exhibit 3.1.1, film number 99579179).
3.2	Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to the Registrant’s Form 10-SB).
3.2.1	Amended Article VIII of the Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to Registrant’s Form DEF 14a filed on March 25, 2009, Appendix A, film number 09703970).
3.2.2	Amended Article II of the Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to Registrant’s Form DEF 14a file on March 16, 2021, Appendix A, film number 21747059).
3.2.3	Amended Article III of the Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to Registrant's Form DEF 14a file on March 16, 2023, Appendix A, film number 23738842).
4.0	Description of Capital Stock (incorporated by reference to registrants Annual Report on Form 10-K filed on March 16, 2020, Exhibit 4.0, film number 20717009).
31.1	Rule 13a-14(a)/15d-14(a) Chief Executive Officer’s Certification.
31.2	Rule 13a-14(a)/15d-14(a) Chief Financial Officer’s Certification.
32.1	Section 1350 Chief Executive Officer’s Certification.
32.2	Section 1350 Chief Financial Officer’s Certification.
101	The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Net Loss and Comprehensive Loss , (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

41

CSB BANCORP, INC.

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.

		CSB BANCORP, INC.
		(Registrant)
Date:	November 13, 2023	/s/ Eddie L. Steiner
		Eddie L. Steiner
		President
		Chief Executive Officer
Date:	November 13, 2023	/s/ Paula J. Meiler
		Paula J. Meiler
		Senior Vice President
		Chief Financial Officer

42

EX-31.1

CSB BANCORP, INC.

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certification

President and Chief Executive Officer

I, Eddie L. Steiner, certify that:

1.I have reviewed this quarterly report on Form 10-Q of CSB 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, including its consolidated subsidiaries, is made known to us by others within those entities, 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 (or persons performing the equivalent functions):

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.

Date: November 13, 2023

/s/ Eddie L. Steiner

Eddie L. Steiner

President and

Chief Executive Officer

EX-31.2

CSB BANCORP, INC.

EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a) Certification

Senior Vice President and Chief Financial Officer

I, Paula J. Meiler, certify that:

1.I have reviewed this quarterly report on Form 10-Q of CSB 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:

1.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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

2.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;

3.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

4.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 (or persons performing the equivalent functions):

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 data; 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.

Date: November 13, 2023

/s/ Paula J. Meiler

Paula J. Meiler

Senior Vice President and

Chief Financial Officer

EX-32.1

CSB BANCORP, INC.

EXHIBIT 32.1

SECTION 1350 CERTIFICATION

In connection with the quarterly report of CSB Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof, (the “Report”), I, Eddie L. Steiner, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 13, 2023

/s/ Eddie L. Steiner

Eddie L. Steiner

President and

Chief Executive Officer

* This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

EX-32.2

CSB BANCORP, INC.

EXHIBIT 32.2

SECTION 1350 CERTIFICATION

In connection with the quarterly report of CSB Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof, (the “Report”), I, Paula J. Meiler, Senior Vice President and Chief Financial Officer, of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 13, 2023

/s/ Paula J. Meiler

Paula J. Meiler

Senior Vice President and

Chief Financial Officer

* This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Nov. 01, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Registrant Name	CSB BANCORP INC /OH
Trading Symbol	CSBB
Entity Central Index Key	0000880417
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 Bankruptcy Proceedings, Reporting Current	true
Title of 12(g) Security	Common Shares, $6.25 par value
Security Exchange Name	NONE
Entity Common Stock, Shares Outstanding		2,671,313
Entity File Number	0-21714
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	34-1687530
Entity Address, Address Line One	91 North Clay Street
Entity Address, Address Line Two	P.O. Box 232
Entity Address, City or Town	Millersburg
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44654
City Area Code	330
Local Phone Number	674-9015
Document Quarterly Report	true
Document Transition Report	false

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Cash and cash equivalents
Cash and due from banks	$ 20,409	$ 19,911
Interest-earning deposits with banks	29,000	66,509
Total cash and cash equivalents	49,409	86,420
Securities
Available-for-sale, at fair value	145,330	150,069
Held-to-maturity (fair value 2023-$187,695; 2022-$211,954)	230,505	247,401
Equity securities	246	244
Restricted stock, at cost	1,561	3,430
Total securities	377,642	401,144
Loans held for sale		52
Loans	680,949	627,171
Less allowance for credit losses	6,691	6,838
Net loans	674,258	620,333
Premises and equipment, net	13,105	13,414
Bank-owned life insurance	25,229	24,709
Goodwill	4,728	4,728
Accrued interest receivable and other assets	12,227	8,308
TOTAL ASSETS	1,156,598	1,159,108
Deposits
Noninterest-bearing	300,018	350,283
Interest-bearing	718,057	673,134
Total deposits	1,018,075	1,023,417
Short-term borrowings	30,734	32,550
Other borrowings	1,808	2,461
Allowance for credit losses on off-balance sheet commitments	492	141
Accrued interest payable and other liabilities	4,079	4,619
Total liabilities	1,055,188	1,063,188
SHAREHOLDERS' EQUITY
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares; outstanding 2,671,313 shares in 2023 and 2,707,576 in 2022	18,629	18,629
Additional paid-in capital	9,815	9,815
Retained earnings	94,614	86,502
Treasury stock at cost: 309,289 shares in 2023 and 273,026 shares in 2022	(7,481)	(6,107)
Accumulated other comprehensive loss	(14,167)	(12,919)
Total shareholders' equity	101,410	95,920
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 1,156,598	$ 1,159,108

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Held-to-maturity, fair value	$ 187,695	$ 211,954
Common stock, par value	$ 6.25	$ 6.25
Common stock, authorized shares	9,000,000	9,000,000
Common stock, shares issued	2,980,602	2,980,602
Common stock, shares outstanding	2,671,313	2,707,576
Treasury stock, at cost	309,289	273,026

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
INTEREST AND DIVIDEND INCOME
Loans, including fees	$ 9,175	$ 6,680	$ 25,855	$ 18,489
Taxable securities	1,910	1,780	5,867	4,721
Nontaxable securities	102	110	305	328
Other	531	586	1,520	863
Total interest and dividend income	11,718	9,156	33,547	24,401
INTEREST EXPENSE
Deposits	2,772	559	6,484	1,252
Short-term borrowings	100	25	236	51
Other borrowings	9	12	31	43
Total interest expense	2,881	596	6,751	1,346
NET INTEREST INCOME	8,837	8,560	26,796	23,055
Provision (recovery) for credit loss expense - loans	13	(250)	287	(895)
Provision (recovery) for credit loss expense - off-balance sheet commitments	164		(1)
Total provision (recovery) for credit loss expense	177	(250)	286	(895)
NET INTEREST INCOME AFTER CREDIT LOSS EXPENSE	8,660	8,810	26,510	23,950
NONINTEREST INCOME
Gain on sale of loans, net	47	49	106	314
Earnings on bank owned life insurance	179	170	520	504
Unrealized gain (loss) on equity securities, net	(11)	(2)	2	2
Other income	208	221	631	587
Total noninterest income	1,705	1,675	5,066	5,099
NONINTEREST EXPENSES
Salaries and employee benefits	3,429	3,199	10,112	9,766
Occupancy expense	290	272	856	820
Equipment expense	199	193	595	604
Professional and director fees	366	555	1,073	1,161
Financial institutions tax	192	195	576	584
Marketing and public relations	124	141	383	362
Software expense	408	397	1,228	1,056
Debit card expense	179	201	494	550
FDIC insurance expense	131	93	380	251
Other expenses	716	699	2,105	2,033
Total noninterest expenses	6,034	5,945	17,802	17,187
Income before income taxes	4,331	4,540	13,774	11,862
FEDERAL INCOME TAX PROVISION	850	890	2,715	2,302
NET INCOME	$ 3,481	$ 3,650	$ 11,059	$ 9,560
Basic net earnings per share	$ 1.3	$ 1.35	$ 4.12	$ 3.52
Diluted net earnings per share	$ 1.3	$ 1.35	$ 4.12	$ 3.52
Deposit Account [Member]
NONINTEREST INCOME
Noninterest income	$ 332	$ 321	$ 924	$ 875
Fiduciary and Trust [Member]
NONINTEREST INCOME
Noninterest income	259	216	769	733
Debit Card [Member]
NONINTEREST INCOME
Noninterest income	525	530	1,579	1,568
Credit Card [Member]
NONINTEREST INCOME
Noninterest income	$ 166	$ 170	$ 535	$ 516

XML

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 3,481	$ 3,650	$ 11,059	$ 9,560
Other comprehensive loss
Unrealized losses arising during the period	(1,127)	(5,189)	(1,722)	(15,334)
Amortization of discount on securities transferred to held-to-maturity	50	64	143	237
Income tax effect	226	1,076	331	3,170
Other comprehensive loss	(851)	(4,049)	(1,248)	(11,927)
Total comprehensive income (loss)	$ 2,630	$ (399)	$ 9,811	$ (2,367)

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Cumulative Effect of Adoption [Memnber]	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Retained Earnings [Member] Cumulative Effect of Adoption [Memnber]	Treasury Stock [Member]	Accumulated Other Comprehensive Loss [Member]
Balance, beginning of period at Dec. 31, 2021	$ 97,315		$ 18,629	$ 9,815	$ 76,715		$ (5,719)	$ (2,125)
Net income	9,560				9,560
Other comprehensive loss	(11,927)							(11,927)
Purchase of treasury shares	(388)						(388)
Cash dividends declared	(2,579)				(2,579)
Balance, end of period at Sep. 30, 2022	91,981		18,629	9,815	83,696		(6,107)	(14,052)
Balance, beginning of period at Jun. 30, 2022	93,662		18,629	9,815	80,940		(5,719)	(10,003)
Net income	3,650				3,650
Other comprehensive loss	(4,049)							(4,049)
Purchase of treasury shares	(388)						(388)
Cash dividends declared	(894)				(894)
Balance, end of period at Sep. 30, 2022	91,981		18,629	9,815	83,696		(6,107)	(14,052)
Balance, beginning of period at Dec. 31, 2022	$ 95,920	$ 52	18,629	9,815	86,502	$ 52	(6,107)	(12,919)
Accounting Standards Update [Extensible Enumeration]	Accounting Standards Update 2016-13 [Member]
Net income	$ 11,059				11,059
Other comprehensive loss	(1,248)							(1,248)
Purchase of treasury shares	(1,374)						(1,374)
Cash dividends declared	(2,999)				(2,999)
Balance, end of period at Sep. 30, 2023	101,410		18,629	9,815	94,614		(7,481)	(14,167)
Balance, beginning of period at Jun. 30, 2023	100,140		18,629	9,815	92,149		(7,137)	(13,316)
Net income	3,481				3,481
Other comprehensive loss	(851)							(851)
Purchase of treasury shares	(344)						(344)
Cash dividends declared	(1,016)				(1,016)
Balance, end of period at Sep. 30, 2023	$ 101,410		$ 18,629	$ 9,815	$ 94,614		$ (7,481)	$ (14,167)

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]
Cash dividends declared per share	$ 0.38	$ 0.33	$ 1.12	$ 0.95
Purchase of treasury shares, shares	9,012	10,448	36,263	10,448

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Statement of Cash Flows [Abstract]
NET CASH FROM OPERATING ACTIVITIES	$ 8,079	$ 8,894
Securities:
Proceeds from repayments, available-for-sale	7,088	11,293
Proceeds from repayments, held-to-maturity	16,798	16,901
Purchases, available-for-sale	(4,458)	(38,868)
Purchases, held-to-maturity		(94,542)
Purchases, equity securities		(131)
Redemption of FHLB stock	1,869	1,183
Loan originations, net	(53,895)	(61,004)
Property, equipment, and software acquisitions	(308)	(217)
Net cash used in investing activities	(32,906)	(165,385)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in deposits	(5,342)	26,527
Net decrease in short-term borrowings	(1,816)	(2,331)
Repayment of other borrowings	(653)	(879)
Cash dividends paid	(2,999)	(2,579)
Purchase of treasury shares	(1,374)	(388)
Net cash (used in) provided by financing activities	(12,184)	20,350
NET DECREASE IN CASH AND CASH EQUIVALENTS	(37,011)	(136,141)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	86,420	243,657
CASH AND CASH EQUIVALENTS AT END OF PERIOD	49,409	107,516
Cash paid during the year for:
Interest	6,584	1,351
Income taxes	$ 3,365	$ 1,760

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements include the accounts of CSB Bancorp, Inc. and its wholly-owned subsidiaries, The Commercial and Savings Bank (the “Bank”) and CSB Investment Services, LLC (together referred to as the “Company” or “CSB”). All significant intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated financial statements have been prepared without audit. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the Company’s financial position at September 30, 2023, and the results of operations and changes in cash flows for the periods presented have been made.

Certain information and footnote disclosures typically included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been omitted. The Annual Report for CSB for the year ended December 31, 2022, contains Consolidated Financial Statements and related footnote disclosures, which should be read in conjunction with the accompanying condensed Consolidated Financial Statements. The results of operations for the periods ended September 30, 2023 are not necessarily indicative of the operating results for the full year or any future interim period.

Certain items in the prior-year financial statements were reclassified to conform to the current-year presentation. Such reclassifications had no effect on net income or shareholders’ equity.

ALLOWANCE FOR CREDIT LOSSES - LOANS AND LEASES POLICY

In connection with our adoption of ASU 2016-13, we made changes to our loan portfolio segments to align with the methodology applied in determining the allowance under CECL. Refer to Note 3 Loans, for further discussion of these portfolio segments. In addition to our existing segments, our new segmentation breaks out commercial lessors of buildings, and consumer indirect loans as well as separating consumer mortgage loans from home equity line of credit loans.

The ACL is a valuation reserve established and maintained by charges against operating income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The ACL is an estimate of expected credit losses, measured over the contractual life of a loan (adjusted for expected prepayment), that considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.

The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.

The ACL for homogeneous loans is calculated using a life-time loss rate methodology with both a quantitative and a qualitative analysis that is applied on a quarterly basis. The ACL model is comprised of eight distinct portfolio segments: 1) Commercial and Industrial or C&I, 2) Commercial Real Estate, or CRE, 3) Commercial Lessors of Buildings, 4) Construction, 5) Consumer Mortgage, 6) Home Equity Line of Credit or HELOC, 7) Consumer Installment, and 8) Consumer Indirect loans. Each segment has a distinct set of risk characteristics monitored by management. We further evaluate the ACL at a disaggregated level which includes type of collateral, loan participations, non-owner occupied and our internal risk rating system for the commercial segments, and type of collateral and lien position, for the consumer segments.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Historical credit loss experience is the basis for the estimation of expected credit losses. We apply historical loss rates to pools of loans with similar risk characteristics. After consideration of the historic loss calculation, management applies qualitative adjustments to reflect the current conditions and reasonable and supportable forecasts not already reflected in the historical loss information at the balance sheet date. Our reasonable and supportable forecast adjustment is based on the unemployment forecast and management judgment. For periods beyond our two-year reasonable and supportable forecast, we revert to the historical loss rate. The qualitative adjustments for current conditions are based upon changes in lending policies and practices, change in economic conditions, change in nature of the portfolio, experience and ability of lending staff, problem loan trends, quality of the bank’s loan review system, value of underlying collateral for collateral dependent loans, the existence of and changes in concentrations, and other external factors. These modified historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve. A similar process is employed to calculate a reserve assigned to the portion of off-balance sheet commitments that we expect to fund, specifically unfunded loan commitments, and any needed reserve is recorded in other liabilities.

The ACL for individual loans begins with the use of normal credit review procedures to identify whether a loan no longer shares similar risk characteristics with other pooled loans and therefore, should be individually assessed. We evaluate all commercial loans greater than $500 thousand that meet the following criteria: 1) when it is determined that foreclosure is probable, 2) substandard, doubtful and nonperforming loans when repayment is expected to be provided substantially through the operation or sale of the collateral, and 3) when it is determined by management that a loan does not share similar risk characteristics with other loans. Collateral values are discounted to consider disposition costs when appropriate. A specific reserve is established or a charge-off is taken if the fair value of the loan is less than the loan balance.

Although we believe our process for determining the ACL appropriately considers all the factors that would likely result in credit losses, the process includes subjective elements and may be susceptible to significant change. To the extent actual losses are higher than management estimates, additional provision for credit losses could be required and could adversely affect our earnings or financial position in future periods.

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

In preparing the Consolidated Financial Statements, in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Balance Sheets and reported amounts of revenues and expenses during each reporting period. Actual results could differ from those estimates. The most significant estimates susceptible to change in the near term relate to management’s determination of the allowance for credit losses and the fair value of financial instruments.

ACCOUNTING PRONOUNCEMENTS ADOPTED IN 2023

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and subsequent related updates. This ASU replaces the incurred loss methodology for recognizing credit losses and requires businesses and other organizations to measure the current expected credit losses (CECL) on financial assets measured at amortized cost, including loans and held-to-maturity securities, net investments in leases, off-balance sheet credit exposures such as unfunded commitments, and other financial instruments. In addition, ASC 326 requires credit losses on available-for-sale debt securities to be presented as an allowance rather than as a write-down when management does not intend to sell or believes that it is not more likely than not they will be required to sell the debt securities. This guidance became effective on January 1, 2023 for the Bank. The results reported for periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable accounting standards.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Bank adopted this guidance, and subsequent related updates, using the modified retrospective approach for all financial assets measured at amortized cost, including loans and held-to-maturity debt securities, available-for-sale debt securities and unfunded commitments. On January 1, 2023, the Bank recorded a cumulative effect increase to retained earnings of $52 thousand, net of tax, of which $442 thousand related to loans, offset by $390 thousand related to unfunded commitments, net of tax. There was no allowance for credit losses recorded for either available-for-sale or held-to-maturity debt securities. See Note 3 for further discussion on the adoption of CECL.

The Bank adopted the provisions of ASC 326 related to presenting other-than-temporary impairment on available-for- sale debt securities on January 1, 2023 using the prospective transition approach, though no such charges had been recorded on the securities held by the Bank as of the date of adoption.

The Bank expanded the pooling utilized under the legacy incurred loss method to include additional segmentation based on risk. The impact of the change from the incurred loss model to the current expected credit loss model is detailed below:

	January 1, 2023
(Dollars in thousands)	Pre-adoption		Adoption Impact			As Reported
Assets:
ACL on loans
Commercial and industrial	$	1,110	$	658		$	1,768
Commercial real estate		2,760		(541	)		2,219
Commercial lessors of buildings		—		974			974
Construction		803		(515	)		288
Consumer mortgage		1,268		(580	)		688
Home equity line of credit		—		201			201
Consumer installment		233		(183	)		50
Consumer indirect		—		91			91
Unallocated		664		(664	)		—
Total allowance for credit losses - loans		6,838		(559	)	$	6,279
Liabilities:
ACL for off-balance sheet commitments		—		493			493
Total allowance for credit losses	$	6,838		(66	)	$	6,772

The following table presents the Bank's loan portfolio, prior to the adoption of ASC 326, by category of loans and the impact of the change from the adoption of the standard:

(Dollars in thousands)	December 31, 2022			Adoption Impact			Post Adoption January 1, 2023
Commercial and industrial	$	129,343		$	(2,209	)	$	127,134
Commercial real estate		231,785			(70,625	)		161,160
Commercial lessors of buildings		—			83,728			83,728
Construction		55,318			(10,452	)		44,866
Consumer mortgage		194,125			(44,338	)		149,787
Home equity line of credit		—			44,243			44,243
Consumer installment		16,387			(6,730	)		9,657
Consumer indirect		—			6,383			6,383
	$	626,958		$	—		$	626,958
Gross loans prior to deferred fees
Deferred loan costs, net		213			—			213
Allowance for credit losses		(6,838	)		559			(6,279	)
Total net loans	$	620,333		$	559		$	620,892

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments – Credit Losses (ASC 326): Troubled Debt Restructurings (TDRs) and Vintage Disclosures”. The guidance amends ASC 326 to eliminate the accounting guidance for TDRs by creditors, while enhancing disclosure requirements for certain loan refinancing and restructuring activities by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying TDR recognition and measurement guidance, creditors will determine whether a modification results in a new loan or continuation of existing loan. The guidance also requires disclosures about the performance of modified loans to borrowers experiencing financial difficulty in the 12 months following the modification.

These amendments are intended to enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, the amendments to ASC 326 require that an entity disclose current period gross write-offs by year of origination within the vintage disclosures, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The guidance is only for entities that have adopted the amendments in Update 2016-13. This guidance has been adopted as of January 1, 2023, however, there have been no reportable loan modifications during the nine months ended September 30, 2023.

XML

Securities

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Securities

Note 2 – SECURITIES

Securities consist of the following on September 30, 2023 and December 31, 2022:

(Dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
September 30, 2023
Available-for-sale
U.S. Treasury securities	$	23,133	$	—	$	(675	)	$	22,458
U.S. Government agencies		13,999		—		(1,151	)		12,848
Mortgage-backed securities of government agencies		74,457		2		(10,008	)		64,451
Asset-backed securities of government agencies		569		—		(17	)		552
State and political subdivisions		20,372		—		(1,573	)		18,799
Corporate bonds		29,158		—		(2,936	)		26,222
Total available-for-sale		161,688		2		(16,360	)		145,330
Held-to-maturity
U.S. Treasury securities	$	10,292	$	—	$	(1,083	)	$	9,209
Mortgage-backed securities of government agencies		217,656		—		(41,334	)		176,322
State and political subdivisions		2,557		—		(393	)		2,164
Total held-to-maturity		230,505		—		(42,810	)		187,695
Equity securities		185		61		—			246
Restricted stock		1,561		—		—			1,561
Total securities	$	393,939	$	63	$	(59,170	)	$	334,832
December 31, 2022
Available-for-sale
U.S. Treasury securities	$	23,194	$	—	$	(969	)	$	22,225
U.S. Government agencies		13,999		—		(1,369	)		12,630
Mortgage-backed securities of government agencies		77,677		72		(8,859	)		68,890
Asset-backed securities of government agencies		633		—		(15	)		618
State and political subdivisions		20,462		—		(985	)		19,477
Corporate bonds		28,740		—		(2,511	)		26,229
Total available-for-sale		164,705		72		(14,708	)		150,069
Held-to-maturity
U.S Treasury securities	$	12,753	$	—	$	(1,136	)	$	11,617
Mortgage-backed securities of government agencies		232,068		—		(34,051	)		198,017
State and political subdivisions		2,580		1		(261	)		2,320
Total held-to-maturity		247,401		1		(35,448	)		211,954
Equity securities		185		59		—			244
Restricted stock		3,430		—		—			3,430
Total securities	$	415,721	$	132	$	(50,156	)	$	365,697

Note 2 – SECURITIES (continued)

The amortized cost and fair value of debt securities on September 30, 2023, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(Dollars in thousands)	Amortized cost		Fair value
Available-for-sale
Due in one year or less	$	15,006	$	14,780
Due after one through five years		55,512		51,631
Due after five through ten years		24,135		21,304
Due after ten years		67,035		57,615
Total debt securities available-for-sale	$	161,688	$	145,330
Held-to-maturity
Due in one year or less	$	—	$	—
Due after one through five years		7,434		6,876
Due after five through ten years		5,138		4,295
Due after ten years		217,933		176,524
Total debt securities held-to-maturity	$	230,505	$	187,695

Securities with a fair value of approximately $129.1 million and $110.1 million were pledged on September 30, 2023 and December 31, 2022, respectively, to secure public deposits, as well as other deposits and borrowings as required or permitted by law.

Restricted stock primarily consists of investments in Federal Home Loan Bank of Cincinnati (FHLB) and Federal Reserve Bank stock. The Bank’s investment in FHLB stock amounted to approximately $1.0 million and $2.9 million on September 30, 2023 and December 31, 2022. The FHLB has redeemed approximately $1.9 million in stock at $100 par value per share during the nine month period ended September 30, 2023. Federal Reserve Bank stock was $471 thousand on September 30, 2023 and December 31, 2022.

There were no proceeds from sales of securities for the three and nine-month periods ended September 30, 2023, and 2022. All gains and losses recognized on equity securities during the three and nine-month periods were unrealized.

Note 2 – SECURITIES (continued)

The following table presents gross unrealized losses and fair value of securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, on September 30, 2023 and December 31, 2022:

	Securities in a continuous unrealized loss position
	Less than 12 months					12 months or more					Total
(Dollars in thousands)	Gross unrealized losses			Fair value		Gross unrealized losses			Fair value		Gross unrealized losses			Fair value
September 30, 2023
Available-for-sale
U.S. Treasury securities	$	—		$	—	$	(675	)	$	22,458	$	(675	)	$	22,458
U.S. Government agencies		—			—		(1,151	)		12,848		(1,151	)		12,848
Mortgage-backed securities of government    agencies		(235	)		12,748		(9,773	)		51,513		(10,008	)		64,261
Asset-backed securities of government    agencies		—			—		(17	)		552		(17	)		552
State and political subdivisions		(79	)		1,952		(1,494	)		16,622		(1,573	)		18,574
Corporate bonds		(1	)		492		(2,935	)		25,730		(2,936	)		26,222
Held-to-maturity
U.S. Treasury securities		—			—		(1,083	)		9,209		(1,083	)		9,209
Mortgage-backed securities of government    agencies		(356	)		8,080		(40,978	)		168,233		(41,334	)		176,313
State and political subdivisions		(21	)		393		(372	)		1,771		(393	)		2,164
Total securities with unrealized losses	$	(692	)	$	23,665	$	(58,478	)	$	308,936	$	(59,170	)	$	332,601
December 31, 2022
Available-for-sale
U.S. Treasury securities	$	(798	)	$	17,405	$	(171	)	$	4,820	$	(969	)	$	22,225
U.S. Government agencies		—			—		(1,369	)		12,630		(1,369	)		12,630
Mortgage-backed securities of government    agencies		(1,046	)		16,188		(7,813	)		44,519		(8,859	)		60,707
Asset-backed securities of government    agencies		—			—		(15	)		618		(15	)		618
State and political subdivisions		(189	)		9,079		(796	)		9,848		(985	)		18,927
Corporate bonds		(1,165	)		13,502		(1,346	)		12,727		(2,511	)		26,229
Held-to-maturity
U.S. Treasury securities		—			—		(1,136	)		11,617		(1,136	)		11,617
Mortgage-backed securities of government    agencies		(9,733	)		79,325		(24,318	)		118,692		(34,051	)		198,017
State and political subdivisions		—			—		(261	)		1,903		(261	)		1,903
Total securities with unrealized losses	$	(12,931	)	$	135,499	$	(37,225	)	$	217,374	$	(50,156	)	$	352,873

Note 2 – SECURITIES (continued)

There were 203 securities in an unrealized loss position on September 30, 2023, 183 of which were in a continuous loss position for twelve (12) months or more. Each quarter the Company conducts a comprehensive security-level impairment assessment on the securities portfolio. Management believes the Company will fully recover the cost of these securities. Unrealized losses on the Company’s fixed-rate debt securities are a result of interest rate increases. U.S. Treasury securities and investments in securities of U.S. government sponsored agency bonds comprise $100 million of total AFS securities. The remaining $45 million of non-agency debt securities is made up of Corporate Bonds and debt securities to State and Political Subdivisions. For non-agency debt securities, the Company verified the current credit ratings remain above investment grade. Non-rated debt securities total $5 million. Annually, management reviews the credit profile of each non-rated issue and assesses whether any impairment to the contractually obligated cash flow is likely to occur. Based on these reviews, management has concluded the underlying creditworthiness for each security remains sufficient to maintain required payment obligations and, therefore, no allowance for credit losses has been recorded. Management believes the value will recover as the securities approach maturity or market interest rates change.

The Bank monitors the credit quality of held-to-maturity debt securities primarily through utilizing their credit rating. The Bank monitors the credit rating on a quarterly basis. There are no nonperforming held-to-maturity securities. As of September 30, 2023, no ACL was required for any held-to-maturity security. The majority of the securities are explicitly or implicitly guaranteed by the United States government, and any estimate of expected credit losses would be insignificant to the Bank. The following table summarizes the amortized cost of held-to maturity debt securities at September 30, 2023, aggregated by credit quality indicator:

(Dollars in thousands)	U.S. Treasury securities		Mortgage- backed securities of government agencies		State and political subdivisions
September 30, 2023
Credit rating:
AAA / AA / A	$	10,292	$	217,656	$	2,557
BBB / BB / B		—		—		—
Lower than B		—		—		—
Non-rated		—		—		—
Total	$	10,292	$	217,656	$	2,557

XML

Loans

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Loans

NOTE 3 – LOANS

The composition of net loans receivable as of September 30, 2023 and December 31, 2022:

(Dollars in thousands)	September 30, 2023
Commercial and industrial	$	143,227
Commercial real estate		188,910
Commercial lessors of buildings		78,520
Construction		44,446
Consumer mortgage		167,419
Home equity line of credit		41,093
Consumer installment		11,197
Consumer indirect		6,168
Total loans		680,980
Allowance for credit losses		(6,691	)
Deferred loan fees, net		(31	)
Net Loans	$	674,258

(Dollars in thousands)	December 31, 2022
Commercial and industrial	$	129,343
Commercial real estate		231,785
Residential real estate		194,125
Construction & land development		55,318
Consumer		16,387
Total loans		626,958
Allowance for loan losses		(6,838	)
Deferred loan costs, net		213
Total Loans *	$	620,333

* See Note 1 for reclassification of balances due to the adoption of ASC 326.

Loan Origination/Risk Management

The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.

Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationship banking rather than transactional banking. The Company’s management examines current and occasionally projected cash flows to determine the ability of the borrower to repay their obligations as agreed. Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers; however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable, inventory, and equipment, and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

NOTE 3 – LOANS (CONTINUED)

Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single industry. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied.

With respect to loans to developers and builders that are secured by non-owner-occupied properties, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing independent appraisal reviews, sensitivity analysis of absorption and lease rates, and financial analysis of the developers and property owners. Construction and land development loans are generally based upon estimates of costs and value associated with the completed project. These estimates may be inaccurate.

Construction and land development loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property, or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing.

The Company originates consumer loans utilizing a judgmental underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed, jointly by line and staff personnel. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, mitigates risk.

The Company maintains an independent credit department that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures.

Loans serviced for others approximated $132.2 and $137.5 million on September 30, 2023 and December 31, 2022, respectively.

NOTE 3 – LOANS (CONTINUED)

Concentrations of Credit

Nearly all the Company’s lending activity occurs within the state of Ohio, including the four counties of Holmes, Stark, Tuscarawas and Wayne, as well as other markets. The majority of the Company’s loan portfolio consists of commercial and commercial real estate loans. Credit concentrations, including commitments, as determined using North American Industry Classification Codes (NAICS), to the two largest industries compared to total loans on September 30, 2023, included $62.9 million, or 9%, of total loans to lessors of non-residential buildings, and $39.6 million, or 6%, of total loans to manufacturers of animal food. These loans are generally secured by real property and equipment, with repayment expected from operational cash flow. Credit evaluation is based on a review of cash flow coverage of principal, interest payments, and the adequacy of the collateral received.

Allowance for Credit Losses

The following table details activity in the allowance for credit losses ("ACL") by portfolio segment for the three and nine months ended September 30, 2023. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

For the three months ended in September 2023, the decrease in the provision for commercial and industrial loans primarily relates to the recovery of prior loan charge-offs, as well as the decrease in substandard loan balances in this loan category. The remaining provision changes for the quarter are primarily a result of changes in loan volume in each loan category.

For the nine month period in 2023, the decrease in provision for commercial real estate loans is due to the payoff of one larger loan relationship with a specific allocation. The increase in the provision for commercial lessors of buildings relates to the increase in loans graded special mention in this category. All other changes during the nine month period are related to loan volume changes.

(Dollars in thousands)	Beginning Balance		Impact of Adopting ASC 326			Charge-offs			Recoveries		Provisions (Recovery)			Ending Balance
Three Months Ended September 30, 2023
Commercial and industrial	$	2,119	$	—		$	—		$	147	$	(303	)	$	1,963
Commercial real estate		1,882		—			—			8		239			2,129
Commercial lessors of buildings		1,237		—			—			—		(11	)		1,226
Construction		283		—			—			—		(28	)		255
Consumer mortgage		714		—			—			—		61			775
Home equity line of credit		178		—			—			—		9			187
Consumer installment		52		—			(8	)		—		13			57
Consumer indirect		94		—			(35	)		7		33			99
Unallocated		—		—			—			—		—			—
	$	6,559	$	—		$	(43	)	$	162	$	13		$	6,691
Nine Months Ended September 30, 2023
Commercial and industrial	$	1,110	$	658		$	—		$	166	$	29		$	1,963
Commercial real estate		2,760		(541	)		—			9		(99	)		2,129
Commercial lessors of buildings		—		974			—			—		252			1,226
Construction		803		(515	)		—			—		(33	)		255
Consumer mortgage		1,268		(580	)		—			1		86			775
Home equity line of credit		—		201			—			—		(14	)		187
Consumer installment		233		(183	)		(31	)		12		26			57
Consumer indirect		—		91			(66	)		34		40			99
Unallocated		664		(664	)		—			—		—			—
	$	6,838	$	(559	)	$	(97	)	$	222	$	287		$	6,691

NOTE 3 – LOANS (CONTINUED)

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2022.

(Dollars in thousands)	Commercial and industrial			Commercial Real Estate			Residential Real Estate		Construction & Land Development			Consumer			Unallocated		Total
Three Months Ended September 30, 2022
Beginning balance	$	1,213		$	2,422		$	1,177	$	1,607		$	395		$	454	$	7,268
(Recovery of) provision for loan    losses		45			(298	)		111		(331	)		(137	)		360		(250	)
Charge-offs		(13	)		(12	)		—		—			(4	)				(29	)
Recoveries		4			—			1		—			14					19
Net (charge-offs) recoveries		(9	)		(12	)		1		—			10					(10	)
Ending balance	$	1,249		$	2,112		$	1,289	$	1,276		$	268		$	814	$	7,008
Nine Months Ended September 30, 2022
Beginning balance	$	1,240		$	2,838		$	992	$	1,380		$	421		$	747	$	7,618
(Recovery of) provision for loan    losses		30			(715	)		295		(416	)		(156	)		67		(895	)
Charge-offs		(31	)		(12	)		—		—			(28	)				(71	)
Recoveries		10			1			2		312			31					356
Net (charge-offs) recoveries		(21	)		(11	)		2		312			3					285
Ending balance	$	1,249		$	2,112		$	1,289	$	1,276		$	268		$	814	$	7,008

NOTE 3 – LOANS (CONTINUED)

Age Analysis of Past-Due Loans Receivable and Nonperforming 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.

(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days + Past Due		Total Past Due		Total Loans
September 30, 2023
Commercial and industrial	$	143,026	$	184	$	17	$	—	$	201	$	143,227
Commercial real estate		188,576		334		—		—		334		188,910
Commercial lessors of buildings		78,520		—		—		—		—		78,520
Construction		44,446		—		—		—		—		44,446
Consumer mortgage		166,980		394		45		—		439		167,419
Home equity line of credit		40,874		219		—		—		219		41,093
Consumer installment		11,044		121		20		12		153		11,197
Consumer indirect		6,168		—		—		—		—		6,168
Total Loans	$	679,634	$	1,252	$	82	$	12	$	1,346	$	680,980

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of September 30, 2023:

(Dollars in thousands)	Nonaccrual with no ACL		Nonaccrual with ACL		Total Nonaccrual		Loans Past Due Over 90 Days Still Accruing		Total Nonperforming
September 30, 2023
Commercial and industrial	$	17	$	—	$	17	$	—	$	17
Commercial real estate		79		—		79		—		79
Commercial lessors of buildings		—		—		—		—		—
Construction		—		—		—		—		—
Consumer mortgage		110		—		110		—		110
Home equity line of credit		—		—		—		—		—
Consumer installment		16		—		16		12		28
Consumer indirect		26		—		26		—		26
Total Loans	$	248	$	—	$	248	$	12	$	260

Interest income recognized on nonaccrual loans for the nine months ended September 30, 2023 was $1 thousand on commercial real estate loans and $22 thousand on consumer mortgage loans. Several of the consumer mortgage loans are at an amortized cost basis of $0 and all payments are being recognized as interest income.

NOTE 3 – LOANS (CONTINUED)

The following table presents the aging of past due loans and nonaccrual loans as of December 31, 2022:

			Accruing Loans
(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days + Past Due		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
December 31, 2022
Commercial and industrial	$	129,270	$	70	$	3	$	—	$	—	$	73	$	129,343
Commercial real estate		231,693		—		—		—		92		92		231,785
Residential real estate		193,794		95		137		—		99		331		194,125
Construction & land development		55,286		32		—		—		—		32		55,318
Consumer		16,091		103		128		—		65		296		16,387
Total Loans	$	626,134	$	300	$	268	$	—	$	256	$	824	$	626,958

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis includes all commercial loans before origination and an annual review of those with an outstanding commitment greater than $500 thousand. The Company uses the following definitions for risk ratings:

Pass. Loans classified as pass (Cash Secured, Exceptional, Acceptable, Monitor, or Pass Watch) may exhibit a wide array of characteristics but at a minimum represent an acceptable risk to the Bank. Borrowers in this rating may have leveraged but acceptable balance sheet positions, satisfactory asset quality, stable to favorable sales and earnings trends, acceptable liquidity and adequate cash flow. Loans are considered fully collectible and require an average amount of administration. While generally adhering to credit policy, these loans may exhibit occasional exceptions that do not result in undue risk to the Bank. Borrowers are generally capable of absorbing setbacks, financial and otherwise, without the threat of failure.

Special Mention. Assets assigned a Special Mention grade are not considered classified assets but are considered criticized. These assets exhibit potential weaknesses that, deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. Loans in this rating warrant special attention but have not yet reached the point of concern for loss. These assets have deteriorated sufficiently to the point they would have difficulty refinancing elsewhere. Similarly, purchasers of the business would not be eligible for bank financing unless they represent a significantly stronger credit risk.

Substandard. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

NOTE 3 – LOANS (CONTINUED)

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans. Based on the most recent analysis performed, the following tables present the recorded investment in non-homogeneous loans by internal risk rating system as of September 30, 2023 and December 31, 2022:

	Term Loans Amortized Costs Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior						Total
September 30, 2023
Commercial and industrial:
Pass	$	21,665	$	27,127	$	13,867	$	5,840	$	4,057	$	8,540	$	45,546	$	—	$	126,642
Special mention		16		19		651		178		90		352		7,248		—		8,554
Substandard		294		570		483		901		60		1,230		4,493		—		8,031
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	21,975	$	27,716	$	15,001	$	6,919	$	4,207	$	10,122	$	57,287	$	—	$	143,227
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Pass	$	20,649	$	36,877	$	57,330	$	14,776	$	19,773	$	24,035	$	695	$	—	$	174,135
Special Mention		213		465		652		398		—		2,688		—		—		4,416
Substandard		—		—		902		—		471		8,986		—		—		10,359
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	20,862	$	37,342	$	58,884	$	15,174	$	20,244	$	35,709	$	695	$	—	$	188,910
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial lessors of buildings:
Pass	$	13,317	$	22,938	$	15,821	$	6,516	$	3,594	$	9,202	$	381	$	—	$	71,769
Special Mention		—		446		1,513		—		3,627		—		—		—		5,586
Substandard		—		—		—		999		—		166		—		—		1,165
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	13,317	$	23,384	$	17,334	$	7,515	$	7,221	$	9,368	$	381	$	—	$	78,520
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction:
Pass	$	16,348	$	19,495	$	599	$	275	$	288	$	269	$	—	$	—	$	37,274
Special Mention		—		289		6		635		—		—		—		—		930
Substandard		—		—		—		33		80		—		—		—		113
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	16,348	$	19,784	$	605	$	943	$	368	$	269	$	—	$	—	$	38,317
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total
Pass	$	71,979	$	106,437	$	87,617	$	27,407	$	27,712	$	42,046	$	46,622	$	—	$	409,820
Special Mention		229		1,219		2,822		1,211		3,717		3,040		7,248		—		19,486
Substandard		294		570		1,385		1,933		611		10,382		4,493		—		19,668
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	72,502	$	108,226	$	91,824	$	30,551	$	32,040	$	55,468	$	58,363	$	—	$	448,974

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
December 31, 2022
Commercial and industrial	$	119,353	$	282	$	7,927	$	—	$	1,781	$	129,343
Commercial real estate		220,414		485		8,352		—		2,534		231,785
Construction & land development		40,640		6,655		—		—		8,023		55,318
Total	$	380,407	$	7,422	$	16,279	$	—	$	12,338	$	416,446

NOTE 3 – LOANS (CONTINUED)

The Company monitors the credit risk profile by payment activity for the loan classes listed below. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. The following table presents the amortized cost in residential consumer loans based on payment activity:

	Term Loans Amortized Costs Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior						Total
September 30, 2023
Consumer mortgage:
Performing	$	19,430	$	35,098	$	38,086	$	33,815	$	9,080	$	31,800	$	—	$	—	$	167,309
Nonperforming		—		—		—		—		—		110		—		—		110
Total	$	19,430	$	35,098	$	38,086	$	33,815	$	9,080	$	31,910	$	—	$	—	$	167,419
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction
Performing	$	3,422	$	1,736	$	270	$	576	$	83	$	42	$	—	$	—	$	6,129
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	3,422	$	1,736	$	270	$	576	$	83	$	42	$	—	$	—	$	6,129
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home equity line of credit:
Performing	$	—	$	—	$	—	$	—	$	—	$	—	$	41,046	$	47	$	41,093
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	41,046	$	47	$	41,093
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer installment:
Performing	$	5,410	$	3,476	$	1,187	$	603	$	211	$	208	$	74	$	—	$	11,169
Nonperforming		—		1		17		—		10		—		—		—		28
Total	$	5,410	$	3,477	$	1,204	$	603	$	221	$	208	$	74	$	—	$	11,197
YTD gross charge-offs	$	1	$	11	$	10	$	3	$	2	$	4	$	—	$	—	$	31
Consumer indirect:
Performing	$	760	$	1,219	$	636	$	589	$	643	$	2,295	$	—	$	—	$	6,142
Nonperforming		—		—		—		—		21		5		—		—		26
Total	$	760	$	1,219	$	636	$	589	$	664	$	2,300	$	—	$	—	$	6,168
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	66	$	—	$	—	$	66
Total
Performing	$	29,022	$	41,529	$	40,179	$	35,583	$	10,017	$	34,345	$	41,120	$	47	$	231,842
Nonperforming		—		1		17		—		31		115		—		—		164
Total	$	29,022	$	41,530	$	40,196	$	35,583	$	10,048	$	34,460	$	41,120	$	47	$	232,006

Consumer mortgages are substantially secured by one to four family owner occupied properties and consumer indirect loans are substantially secured by recreational vehicles. All nonperforming consumer loans are evaluated when placed on nonaccrual status and may be charged down based on the fair value less cost to sell if that value is lower than the outstanding balance.

Modifications to Borrowers Experiencing Financial Difficulty

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

In some cases, the Bank may provide multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

There were no modifications of loans to borrowers in financial distress completed during the nine months ended September 30, 2023.

NOTE 3 – LOANS (CONTINUED)

Impaired Loans

The following impaired loan information relates to required disclosures under the previous incurred loan loss methodology and are only presented with prior period information.

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio class, based on the impairment method as of December 31, 2022:

(Dollars in thousands)	Commercial and industrial		Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total
December 31, 2022
Allowance for loan losses:
Individually evaluated for    impairment	$	—	$	—	$	—	$	—	$	4	$	—	$	4
Collectively evaluated for    impairment		1,110		2,760		1,268		803		229		664		6,834
Total ending allowance balance	$	1,110	$	2,760	$	1,268	$	803	$	233	$	664	$	6,838
Loans:
Loans individually    evaluated for    impairment	$	123	$	113	$	677	$	—	$	123			$	1,036
Loans collectively    evaluated for    impairment		129,220		231,672		193,448		55,318		16,264				625,922
Total ending loans balance	$	129,343	$	231,785	$	194,125	$	55,318	$	16,387			$	626,958

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2022:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total recorded investment1		Related Allowance
December 31, 2022
Commercial and industrial	$	123	$	124	$	—	$	124	$	—
Commercial real estate		117		92		20		112		—
Residential real estate		733		166		518		683		—
Construction & land development		—		—		—		—		—
Consumer		127		6		121		127		4
Total impaired loans	$	1,101	$	387	$	659	$	1,046	$	4

1Includes principal, accrued interest, unearned fees, and origination costs

NOTE 3 – LOANS (CONTINUED)

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated.

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
(Dollars in thousands)	2022		2022
Average recorded investment:
Commercial and industrial	$	255	$	258
Commercial real estate		173		198
Residential real estate		715		781
Construction & land development		—		164
Consumer		131		132
Average recorded investment in impaired loans	$	1,274	$	1,533
Interest income recognized:
Commercial and industrial	$	—	$	2
Commercial real estate		2		6
Residential real estate		7		23
Construction & land development		—		—
Consumer		2		6
Interest income recognized on a cash basis on impaired loans	$	11	$	37

XML

Short-Term Borrowings

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Short-Term Borrowings

NOTE 4 – SHORT-TERM BORROWINGS

The following table provides additional detail regarding repurchase agreements and the related collateral accounted for as secured borrowings.

	Remaining Contractual Maturity Overnight and Continuous
	September 30,		December 31,
(Dollars in thousands)	2023		2022
Securities of U.S. Government Agencies and mortgage-backed securities of    government agencies pledged, fair value	$	30,911	$	32,755
Repurchase agreements		30,734		32,550

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 5 – FAIR VALUE MEASUREMENTS

The Company provides disclosures about assets and liabilities carried at fair value. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. The three broad levels of the fair value hierarchy are described below:

Level I:	Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level II:	Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by corroborated or other means. If the asset or liability has a specified (contractual) term, the Level II input must be observable for substantially the full term of the asset or liability.
Level III:	Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

NOTE 5 – FAIR VALUE MEASUREMENTS (CONTINUED)

The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of September 30, 2023 and December 31, 2022 by level within the fair value hierarchy. No liabilities are carried at fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Equity securities with readily determinable values and U.S. Treasury Notes are valued at the closing price reported on the active market on which the individual securities are traded. Obligations of U.S. government agencies, mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions and corporate bonds are valued at observable market data for similar assets. Equity securities without readily determinable values are carried at amortized cost adjusted for impairment and observable price changes and are not included in the table below.

(Dollars in thousands)	Level I		Level II		Level III		Total
September 30, 2023
Assets:
Securities available-for-sale
U.S. Treasury securities	$	22,458	$	—	$	—	$	22,458
U.S. Government agencies		—		12,848		—		12,848
Mortgage-backed securities of government agencies		—		64,451		—		64,451
Asset-backed securities of government agencies		—		552		—		552
State and political subdivisions		—		18,799		—		18,799
Corporate bonds		—		26,222		—		26,222
Total available-for-sale securities	$	22,458	$	122,872	$	—	$	145,330
Equity securities	$	211	$	—	$	—	$	211
December 31, 2022
Assets:
Securities available-for-sale
U.S. Treasury securities	$	22,225	$	—	$	—	$	22,225
U.S. Government agencies		—		12,630		—		12,630
Mortgage-backed securities of government agencies		—		68,890		—		68,890
Asset-backed securities of government agencies		—		618		—		618
State and political subdivisions		—		19,477		—		19,477
Corporate bonds		—		26,229		—		26,229
Total available-for-sale securities	$	22,225	$	127,844	$	—	$	150,069
Equity securities	$	198	$	—	$	—	$	198

There were no assets measured on a nonrecurring basis on September 30, 2023, and December 31, 2022.

XML

Fair Values of Financial Instruments

9 Months Ended

Sep. 30, 2023

Investments, All Other Investments [Abstract]

Fair Values of Financial Instruments

NOTE 6 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The estimated fair values of recognized financial instruments carried at amortized cost as of September 30, 2023 and December 31, 2022 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
September 30, 2023
Financial assets
Securities held-to-maturity	$	230,505	$	9,209	$	178,486	$	—	$	187,695
Loans held for sale		—		—		—		—		—
Net loans		674,258		—		—		640,671		640,671
Mortgage servicing rights		601		—		—		601		601
Financial liabilities
Deposits	$	1,018,075	$	840,637	$	—	$	179,008	$	1,019,645
Other borrowings		1,808		—		—		1,687		1,687
December 31, 2022
Financial assets
Securities held-to-maturity	$	247,401	$	11,617	$	200,337	$	—	$	211,954
Loans held for sale		52		55		—		—		55
Net loans		620,333		—		—		600,720		600,720
Mortgage servicing rights		621		—		—		621		621
Financial liabilities
Deposits	$	1,023,417	$	905,335	$	—	$	114,478	$	1,019,813
Other borrowings		2,461		—		—		2,321		2,321

Other financial instruments carried at amortized cost include cash and cash equivalents, restricted stock, bank-owned life insurance, accrued interest receivable, short-term borrowings, and accrued interest payable, all of which have a Level I fair value that approximates their carrying value. The Company also has unrecognized financial instruments on September 30, 2023 and December 31, 2022. These financial instruments relate to commitments to extend credit and letters of credit. The aggregate contract amount of such financial instruments was approximately $301 million on September 30, 2023 and $268 million on December 31, 2022. Such amounts are also considered to be the fair values.

The fair value estimates of financial instruments are made at a specific point in time based on relevant market information. Since no ready market exists for a significant portion of the financial instruments, fair value estimates are largely based on judgments after considering such factors as future expected credit losses, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

XML

Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Accumulated Other Comprehensive Loss

Note 7- ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in accumulated other comprehensive loss by component net of tax for the three and nine months ended September 30, 2023 and 2022:

(Dollars in thousands)	Pretax			Tax Effect			After-tax
Three Months Ended September 30, 2023
Balance, beginning of period	$	(16,856	)	$	3,540		$	(13,316	)
Unrealized holding loss on available-for-sale securities arising during    the period		(1,127	)		237			(890	)
Amortization of held-to-maturity discount resulting from transfer		50			(11	)		40
Total other comprehensive loss		(1,077	)		226			(851	)
Balance, end of period	$	(17,933	)	$	3,766		$	(14,167	)
Nine Months Ended September 30, 2023
Balance, beginning of period	$	(16,354	)	$	3,435		$	(12,919	)
Unrealized holding loss on available-for-sale securities arising during    the period		(1,722	)		361			(1,361	)
Amortization of held-to-maturity discount resulting from transfer		143			(30	)		113
Total other comprehensive loss		(1,579	)		331			(1,248	)
Balance, end of period	$	(17,933	)	$	3,766		$	(14,167	)
Three Months ended September 30, 2022
Balance, beginning of period	$	(12,663	)	$	2,660		$	(10,003	)
Unrealized holding loss on available-for-sale securities arising during    the period		(5,189	)		1,090			(4,099	)
Amortization of held-to-maturity discount resulting from transfer		64			(14	)		50
Total other comprehensive loss		(5,125	)		1,076			(4,049	)
Balance, end of period	$	(17,788	)	$	3,736		$	(14,052	)
Nine Months Ended September 30, 2022
Balance, beginning of period	$	(2,691	)	$	566		$	(2,125	)
Unrealized holding loss on available-for-sale securities arising during    the period		(15,334	)		3,220			(12,114	)
Amortization of held-to-maturity discount resulting from transfer		237			(50	)		187
Total other comprehensive loss		(15,097	)		3,170			(11,927	)
Balance, end of period	$	(17,788	)	$	3,736		$	(14,052	)

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Allowance for Credit Losses - Loans and Leases Policy

ALLOWANCE FOR CREDIT LOSSES - LOANS AND LEASES POLICY

In connection with our adoption of ASU 2016-13, we made changes to our loan portfolio segments to align with the methodology applied in determining the allowance under CECL. Refer to Note 3 Loans, for further discussion of these portfolio segments. In addition to our existing segments, our new segmentation breaks out commercial lessors of buildings, and consumer indirect loans as well as separating consumer mortgage loans from home equity line of credit loans.

The ACL is a valuation reserve established and maintained by charges against operating income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The ACL is an estimate of expected credit losses, measured over the contractual life of a loan (adjusted for expected prepayment), that considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.

The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.

The ACL for homogeneous loans is calculated using a life-time loss rate methodology with both a quantitative and a qualitative analysis that is applied on a quarterly basis. The ACL model is comprised of eight distinct portfolio segments: 1) Commercial and Industrial or C&I, 2) Commercial Real Estate, or CRE, 3) Commercial Lessors of Buildings, 4) Construction, 5) Consumer Mortgage, 6) Home Equity Line of Credit or HELOC, 7) Consumer Installment, and 8) Consumer Indirect loans. Each segment has a distinct set of risk characteristics monitored by management. We further evaluate the ACL at a disaggregated level which includes type of collateral, loan participations, non-owner occupied and our internal risk rating system for the commercial segments, and type of collateral and lien position, for the consumer segments.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Historical credit loss experience is the basis for the estimation of expected credit losses. We apply historical loss rates to pools of loans with similar risk characteristics. After consideration of the historic loss calculation, management applies qualitative adjustments to reflect the current conditions and reasonable and supportable forecasts not already reflected in the historical loss information at the balance sheet date. Our reasonable and supportable forecast adjustment is based on the unemployment forecast and management judgment. For periods beyond our two-year reasonable and supportable forecast, we revert to the historical loss rate. The qualitative adjustments for current conditions are based upon changes in lending policies and practices, change in economic conditions, change in nature of the portfolio, experience and ability of lending staff, problem loan trends, quality of the bank’s loan review system, value of underlying collateral for collateral dependent loans, the existence of and changes in concentrations, and other external factors. These modified historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve. A similar process is employed to calculate a reserve assigned to the portion of off-balance sheet commitments that we expect to fund, specifically unfunded loan commitments, and any needed reserve is recorded in other liabilities.

The ACL for individual loans begins with the use of normal credit review procedures to identify whether a loan no longer shares similar risk characteristics with other pooled loans and therefore, should be individually assessed. We evaluate all commercial loans greater than $500 thousand that meet the following criteria: 1) when it is determined that foreclosure is probable, 2) substandard, doubtful and nonperforming loans when repayment is expected to be provided substantially through the operation or sale of the collateral, and 3) when it is determined by management that a loan does not share similar risk characteristics with other loans. Collateral values are discounted to consider disposition costs when appropriate. A specific reserve is established or a charge-off is taken if the fair value of the loan is less than the loan balance.

Although we believe our process for determining the ACL appropriately considers all the factors that would likely result in credit losses, the process includes subjective elements and may be susceptible to significant change. To the extent actual losses are higher than management estimates, additional provision for credit losses could be required and could adversely affect our earnings or financial position in future periods.

Use of Estimates in Preparing Financial Statements

USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

In preparing the Consolidated Financial Statements, in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Balance Sheets and reported amounts of revenues and expenses during each reporting period. Actual results could differ from those estimates. The most significant estimates susceptible to change in the near term relate to management’s determination of the allowance for credit losses and the fair value of financial instruments.

Accounting Pronouncements adopted in 2023

ACCOUNTING PRONOUNCEMENTS ADOPTED IN 2023

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and subsequent related updates. This ASU replaces the incurred loss methodology for recognizing credit losses and requires businesses and other organizations to measure the current expected credit losses (CECL) on financial assets measured at amortized cost, including loans and held-to-maturity securities, net investments in leases, off-balance sheet credit exposures such as unfunded commitments, and other financial instruments. In addition, ASC 326 requires credit losses on available-for-sale debt securities to be presented as an allowance rather than as a write-down when management does not intend to sell or believes that it is not more likely than not they will be required to sell the debt securities. This guidance became effective on January 1, 2023 for the Bank. The results reported for periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable accounting standards.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Bank adopted this guidance, and subsequent related updates, using the modified retrospective approach for all financial assets measured at amortized cost, including loans and held-to-maturity debt securities, available-for-sale debt securities and unfunded commitments. On January 1, 2023, the Bank recorded a cumulative effect increase to retained earnings of $52 thousand, net of tax, of which $442 thousand related to loans, offset by $390 thousand related to unfunded commitments, net of tax. There was no allowance for credit losses recorded for either available-for-sale or held-to-maturity debt securities. See Note 3 for further discussion on the adoption of CECL.

The Bank adopted the provisions of ASC 326 related to presenting other-than-temporary impairment on available-for- sale debt securities on January 1, 2023 using the prospective transition approach, though no such charges had been recorded on the securities held by the Bank as of the date of adoption.

The Bank expanded the pooling utilized under the legacy incurred loss method to include additional segmentation based on risk. The impact of the change from the incurred loss model to the current expected credit loss model is detailed below:

	January 1, 2023
(Dollars in thousands)	Pre-adoption		Adoption Impact			As Reported
Assets:
ACL on loans
Commercial and industrial	$	1,110	$	658		$	1,768
Commercial real estate		2,760		(541	)		2,219
Commercial lessors of buildings		—		974			974
Construction		803		(515	)		288
Consumer mortgage		1,268		(580	)		688
Home equity line of credit		—		201			201
Consumer installment		233		(183	)		50
Consumer indirect		—		91			91
Unallocated		664		(664	)		—
Total allowance for credit losses - loans		6,838		(559	)	$	6,279
Liabilities:
ACL for off-balance sheet commitments		—		493			493
Total allowance for credit losses	$	6,838		(66	)	$	6,772

The following table presents the Bank's loan portfolio, prior to the adoption of ASC 326, by category of loans and the impact of the change from the adoption of the standard:

(Dollars in thousands)	December 31, 2022			Adoption Impact			Post Adoption January 1, 2023
Commercial and industrial	$	129,343		$	(2,209	)	$	127,134
Commercial real estate		231,785			(70,625	)		161,160
Commercial lessors of buildings		—			83,728			83,728
Construction		55,318			(10,452	)		44,866
Consumer mortgage		194,125			(44,338	)		149,787
Home equity line of credit		—			44,243			44,243
Consumer installment		16,387			(6,730	)		9,657
Consumer indirect		—			6,383			6,383
	$	626,958		$	—		$	626,958
Gross loans prior to deferred fees
Deferred loan costs, net		213			—			213
Allowance for credit losses		(6,838	)		559			(6,279	)
Total net loans	$	620,333		$	559		$	620,892

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments – Credit Losses (ASC 326): Troubled Debt Restructurings (TDRs) and Vintage Disclosures”. The guidance amends ASC 326 to eliminate the accounting guidance for TDRs by creditors, while enhancing disclosure requirements for certain loan refinancing and restructuring activities by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying TDR recognition and measurement guidance, creditors will determine whether a modification results in a new loan or continuation of existing loan. The guidance also requires disclosures about the performance of modified loans to borrowers experiencing financial difficulty in the 12 months following the modification.

These amendments are intended to enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, the amendments to ASC 326 require that an entity disclose current period gross write-offs by year of origination within the vintage disclosures, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The guidance is only for entities that have adopted the amendments in Update 2016-13. This guidance has been adopted as of January 1, 2023, however, there have been no reportable loan modifications during the nine months ended September 30, 2023.

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Impact on Loans and Allowance for Credit Losses Due to Adoption of ASU 326

The impact of the change from the incurred loss model to the current expected credit loss model is detailed below:

	January 1, 2023
(Dollars in thousands)	Pre-adoption		Adoption Impact			As Reported
Assets:
ACL on loans
Commercial and industrial	$	1,110	$	658		$	1,768
Commercial real estate		2,760		(541	)		2,219
Commercial lessors of buildings		—		974			974
Construction		803		(515	)		288
Consumer mortgage		1,268		(580	)		688
Home equity line of credit		—		201			201
Consumer installment		233		(183	)		50
Consumer indirect		—		91			91
Unallocated		664		(664	)		—
Total allowance for credit losses - loans		6,838		(559	)	$	6,279
Liabilities:
ACL for off-balance sheet commitments		—		493			493
Total allowance for credit losses	$	6,838		(66	)	$	6,772

The following table presents the Bank's loan portfolio, prior to the adoption of ASC 326, by category of loans and the impact of the change from the adoption of the standard:

(Dollars in thousands)	December 31, 2022			Adoption Impact			Post Adoption January 1, 2023
Commercial and industrial	$	129,343		$	(2,209	)	$	127,134
Commercial real estate		231,785			(70,625	)		161,160
Commercial lessors of buildings		—			83,728			83,728
Construction		55,318			(10,452	)		44,866
Consumer mortgage		194,125			(44,338	)		149,787
Home equity line of credit		—			44,243			44,243
Consumer installment		16,387			(6,730	)		9,657
Consumer indirect		—			6,383			6,383
	$	626,958		$	—		$	626,958
Gross loans prior to deferred fees
Deferred loan costs, net		213			—			213
Allowance for credit losses		(6,838	)		559			(6,279	)
Total net loans	$	620,333		$	559		$	620,892

XML

Securities (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Securities Available-for-Sale and Restricted Stock

Securities consist of the following on September 30, 2023 and December 31, 2022:

(Dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
September 30, 2023
Available-for-sale
U.S. Treasury securities	$	23,133	$	—	$	(675	)	$	22,458
U.S. Government agencies		13,999		—		(1,151	)		12,848
Mortgage-backed securities of government agencies		74,457		2		(10,008	)		64,451
Asset-backed securities of government agencies		569		—		(17	)		552
State and political subdivisions		20,372		—		(1,573	)		18,799
Corporate bonds		29,158		—		(2,936	)		26,222
Total available-for-sale		161,688		2		(16,360	)		145,330
Held-to-maturity
U.S. Treasury securities	$	10,292	$	—	$	(1,083	)	$	9,209
Mortgage-backed securities of government agencies		217,656		—		(41,334	)		176,322
State and political subdivisions		2,557		—		(393	)		2,164
Total held-to-maturity		230,505		—		(42,810	)		187,695
Equity securities		185		61		—			246
Restricted stock		1,561		—		—			1,561
Total securities	$	393,939	$	63	$	(59,170	)	$	334,832
December 31, 2022
Available-for-sale
U.S. Treasury securities	$	23,194	$	—	$	(969	)	$	22,225
U.S. Government agencies		13,999		—		(1,369	)		12,630
Mortgage-backed securities of government agencies		77,677		72		(8,859	)		68,890
Asset-backed securities of government agencies		633		—		(15	)		618
State and political subdivisions		20,462		—		(985	)		19,477
Corporate bonds		28,740		—		(2,511	)		26,229
Total available-for-sale		164,705		72		(14,708	)		150,069
Held-to-maturity
U.S Treasury securities	$	12,753	$	—	$	(1,136	)	$	11,617
Mortgage-backed securities of government agencies		232,068		—		(34,051	)		198,017
State and political subdivisions		2,580		1		(261	)		2,320
Total held-to-maturity		247,401		1		(35,448	)		211,954
Equity securities		185		59		—			244
Restricted stock		3,430		—		—			3,430
Total securities	$	415,721	$	132	$	(50,156	)	$	365,697

Summary of Amortized Cost and Fair Value of Debt Securities

The amortized cost and fair value of debt securities on September 30, 2023, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(Dollars in thousands)	Amortized cost		Fair value
Available-for-sale
Due in one year or less	$	15,006	$	14,780
Due after one through five years		55,512		51,631
Due after five through ten years		24,135		21,304
Due after ten years		67,035		57,615
Total debt securities available-for-sale	$	161,688	$	145,330
Held-to-maturity
Due in one year or less	$	—	$	—
Due after one through five years		7,434		6,876
Due after five through ten years		5,138		4,295
Due after ten years		217,933		176,524
Total debt securities held-to-maturity	$	230,505	$	187,695

Summary of Gross Unrealized Losses and Fair Value of Available for Sale Securities

The following table presents gross unrealized losses and fair value of securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, on September 30, 2023 and December 31, 2022:

	Securities in a continuous unrealized loss position
	Less than 12 months					12 months or more					Total
(Dollars in thousands)	Gross unrealized losses			Fair value		Gross unrealized losses			Fair value		Gross unrealized losses			Fair value
September 30, 2023
Available-for-sale
U.S. Treasury securities	$	—		$	—	$	(675	)	$	22,458	$	(675	)	$	22,458
U.S. Government agencies		—			—		(1,151	)		12,848		(1,151	)		12,848
Mortgage-backed securities of government    agencies		(235	)		12,748		(9,773	)		51,513		(10,008	)		64,261
Asset-backed securities of government    agencies		—			—		(17	)		552		(17	)		552
State and political subdivisions		(79	)		1,952		(1,494	)		16,622		(1,573	)		18,574
Corporate bonds		(1	)		492		(2,935	)		25,730		(2,936	)		26,222
Held-to-maturity
U.S. Treasury securities		—			—		(1,083	)		9,209		(1,083	)		9,209
Mortgage-backed securities of government    agencies		(356	)		8,080		(40,978	)		168,233		(41,334	)		176,313
State and political subdivisions		(21	)		393		(372	)		1,771		(393	)		2,164
Total securities with unrealized losses	$	(692	)	$	23,665	$	(58,478	)	$	308,936	$	(59,170	)	$	332,601
December 31, 2022
Available-for-sale
U.S. Treasury securities	$	(798	)	$	17,405	$	(171	)	$	4,820	$	(969	)	$	22,225
U.S. Government agencies		—			—		(1,369	)		12,630		(1,369	)		12,630
Mortgage-backed securities of government    agencies		(1,046	)		16,188		(7,813	)		44,519		(8,859	)		60,707
Asset-backed securities of government    agencies		—			—		(15	)		618		(15	)		618
State and political subdivisions		(189	)		9,079		(796	)		9,848		(985	)		18,927
Corporate bonds		(1,165	)		13,502		(1,346	)		12,727		(2,511	)		26,229
Held-to-maturity
U.S. Treasury securities		—			—		(1,136	)		11,617		(1,136	)		11,617
Mortgage-backed securities of government    agencies		(9,733	)		79,325		(24,318	)		118,692		(34,051	)		198,017
State and political subdivisions		—			—		(261	)		1,903		(261	)		1,903
Total securities with unrealized losses	$	(12,931	)	$	135,499	$	(37,225	)	$	217,374	$	(50,156	)	$	352,873

Summary of Amortized Cost of Held-to Maturity Debt Securities Aggregated by Credit Quality Indicator

The following table summarizes the amortized cost of held-to maturity debt securities at September 30, 2023, aggregated by credit quality indicator:

(Dollars in thousands)	U.S. Treasury securities		Mortgage- backed securities of government agencies		State and political subdivisions
September 30, 2023
Credit rating:
AAA / AA / A	$	10,292	$	217,656	$	2,557
BBB / BB / B		—		—		—
Lower than B		—		—		—
Non-rated		—		—		—
Total	$	10,292	$	217,656	$	2,557

XML

Loans (Tables)

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Summary of Loans

The composition of net loans receivable as of September 30, 2023 and December 31, 2022:

(Dollars in thousands)	September 30, 2023
Commercial and industrial	$	143,227
Commercial real estate		188,910
Commercial lessors of buildings		78,520
Construction		44,446
Consumer mortgage		167,419
Home equity line of credit		41,093
Consumer installment		11,197
Consumer indirect		6,168
Total loans		680,980
Allowance for credit losses		(6,691	)
Deferred loan fees, net		(31	)
Net Loans	$	674,258

(Dollars in thousands)	December 31, 2022
Commercial and industrial	$	129,343
Commercial real estate		231,785
Residential real estate		194,125
Construction & land development		55,318
Consumer		16,387
Total loans		626,958
Allowance for loan losses		(6,838	)
Deferred loan costs, net		213
Total Loans *	$	620,333

Summary of Allowance for Loan Losses

Allowance for Credit Losses

The following table details activity in the allowance for credit losses ("ACL") by portfolio segment for the three and nine months ended September 30, 2023. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

For the three months ended in September 2023, the decrease in the provision for commercial and industrial loans primarily relates to the recovery of prior loan charge-offs, as well as the decrease in substandard loan balances in this loan category. The remaining provision changes for the quarter are primarily a result of changes in loan volume in each loan category.

For the nine month period in 2023, the decrease in provision for commercial real estate loans is due to the payoff of one larger loan relationship with a specific allocation. The increase in the provision for commercial lessors of buildings relates to the increase in loans graded special mention in this category. All other changes during the nine month period are related to loan volume changes.

(Dollars in thousands)	Beginning Balance		Impact of Adopting ASC 326			Charge-offs			Recoveries		Provisions (Recovery)			Ending Balance
Three Months Ended September 30, 2023
Commercial and industrial	$	2,119	$	—		$	—		$	147	$	(303	)	$	1,963
Commercial real estate		1,882		—			—			8		239			2,129
Commercial lessors of buildings		1,237		—			—			—		(11	)		1,226
Construction		283		—			—			—		(28	)		255
Consumer mortgage		714		—			—			—		61			775
Home equity line of credit		178		—			—			—		9			187
Consumer installment		52		—			(8	)		—		13			57
Consumer indirect		94		—			(35	)		7		33			99
Unallocated		—		—			—			—		—			—
	$	6,559	$	—		$	(43	)	$	162	$	13		$	6,691
Nine Months Ended September 30, 2023
Commercial and industrial	$	1,110	$	658		$	—		$	166	$	29		$	1,963
Commercial real estate		2,760		(541	)		—			9		(99	)		2,129
Commercial lessors of buildings		—		974			—			—		252			1,226
Construction		803		(515	)		—			—		(33	)		255
Consumer mortgage		1,268		(580	)		—			1		86			775
Home equity line of credit		—		201			—			—		(14	)		187
Consumer installment		233		(183	)		(31	)		12		26			57
Consumer indirect		—		91			(66	)		34		40			99
Unallocated		664		(664	)		—			—		—			—
	$	6,838	$	(559	)	$	(97	)	$	222	$	287		$	6,691

NOTE 3 – LOANS (CONTINUED)

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2022.

(Dollars in thousands)	Commercial and industrial			Commercial Real Estate			Residential Real Estate		Construction & Land Development			Consumer			Unallocated		Total
Three Months Ended September 30, 2022
Beginning balance	$	1,213		$	2,422		$	1,177	$	1,607		$	395		$	454	$	7,268
(Recovery of) provision for loan    losses		45			(298	)		111		(331	)		(137	)		360		(250	)
Charge-offs		(13	)		(12	)		—		—			(4	)				(29	)
Recoveries		4			—			1		—			14					19
Net (charge-offs) recoveries		(9	)		(12	)		1		—			10					(10	)
Ending balance	$	1,249		$	2,112		$	1,289	$	1,276		$	268		$	814	$	7,008
Nine Months Ended September 30, 2022
Beginning balance	$	1,240		$	2,838		$	992	$	1,380		$	421		$	747	$	7,618
(Recovery of) provision for loan    losses		30			(715	)		295		(416	)		(156	)		67		(895	)
Charge-offs		(31	)		(12	)		—		—			(28	)				(71	)
Recoveries		10			1			2		312			31					356
Net (charge-offs) recoveries		(21	)		(11	)		2		312			3					285
Ending balance	$	1,249		$	2,112		$	1,289	$	1,276		$	268		$	814	$	7,008

Schedule of Aging of Past Due and Nonaccrual Loans

The following table presents the classes of the loan portfolio summarized by the past-due status.

(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days + Past Due		Total Past Due		Total Loans
September 30, 2023
Commercial and industrial	$	143,026	$	184	$	17	$	—	$	201	$	143,227
Commercial real estate		188,576		334		—		—		334		188,910
Commercial lessors of buildings		78,520		—		—		—		—		78,520
Construction		44,446		—		—		—		—		44,446
Consumer mortgage		166,980		394		45		—		439		167,419
Home equity line of credit		40,874		219		—		—		219		41,093
Consumer installment		11,044		121		20		12		153		11,197
Consumer indirect		6,168		—		—		—		—		6,168
Total Loans	$	679,634	$	1,252	$	82	$	12	$	1,346	$	680,980

The following table presents the aging of past due loans and nonaccrual loans as of December 31, 2022:

			Accruing Loans
(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days + Past Due		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
December 31, 2022
Commercial and industrial	$	129,270	$	70	$	3	$	—	$	—	$	73	$	129,343
Commercial real estate		231,693		—		—		—		92		92		231,785
Residential real estate		193,794		95		137		—		99		331		194,125
Construction & land development		55,286		32		—		—		—		32		55,318
Consumer		16,091		103		128		—		65		296		16,387
Total Loans	$	626,134	$	300	$	268	$	—	$	256	$	824	$	626,958

Schedule of Amortized Cost Basis Of Loans On Nonaccrual Status And Loans Past Due Over 90 Days Still Accruing Interest

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of September 30, 2023:

(Dollars in thousands)	Nonaccrual with no ACL		Nonaccrual with ACL		Total Nonaccrual		Loans Past Due Over 90 Days Still Accruing		Total Nonperforming
September 30, 2023
Commercial and industrial	$	17	$	—	$	17	$	—	$	17
Commercial real estate		79		—		79		—		79
Commercial lessors of buildings		—		—		—		—		—
Construction		—		—		—		—		—
Consumer mortgage		110		—		110		—		110
Home equity line of credit		—		—		—		—		—
Consumer installment		16		—		16		12		28
Consumer indirect		26		—		26		—		26
Total Loans	$	248	$	—	$	248	$	12	$	260

Interest income recognized on nonaccrual loans for the nine months ended September 30, 2023 was $1 thousand on commercial real estate loans and $22 thousand on consumer mortgage loans. Several of the consumer mortgage loans are at an amortized cost basis of $0 and all payments are being recognized as interest income.

Summary of Loans by Credit Quality Indicator

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans. Based on the most recent analysis performed, the following tables present the recorded investment in non-homogeneous loans by internal risk rating system as of September 30, 2023 and December 31, 2022:

	Term Loans Amortized Costs Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior						Total
September 30, 2023
Commercial and industrial:
Pass	$	21,665	$	27,127	$	13,867	$	5,840	$	4,057	$	8,540	$	45,546	$	—	$	126,642
Special mention		16		19		651		178		90		352		7,248		—		8,554
Substandard		294		570		483		901		60		1,230		4,493		—		8,031
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	21,975	$	27,716	$	15,001	$	6,919	$	4,207	$	10,122	$	57,287	$	—	$	143,227
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Pass	$	20,649	$	36,877	$	57,330	$	14,776	$	19,773	$	24,035	$	695	$	—	$	174,135
Special Mention		213		465		652		398		—		2,688		—		—		4,416
Substandard		—		—		902		—		471		8,986		—		—		10,359
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	20,862	$	37,342	$	58,884	$	15,174	$	20,244	$	35,709	$	695	$	—	$	188,910
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial lessors of buildings:
Pass	$	13,317	$	22,938	$	15,821	$	6,516	$	3,594	$	9,202	$	381	$	—	$	71,769
Special Mention		—		446		1,513		—		3,627		—		—		—		5,586
Substandard		—		—		—		999		—		166		—		—		1,165
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	13,317	$	23,384	$	17,334	$	7,515	$	7,221	$	9,368	$	381	$	—	$	78,520
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction:
Pass	$	16,348	$	19,495	$	599	$	275	$	288	$	269	$	—	$	—	$	37,274
Special Mention		—		289		6		635		—		—		—		—		930
Substandard		—		—		—		33		80		—		—		—		113
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	16,348	$	19,784	$	605	$	943	$	368	$	269	$	—	$	—	$	38,317
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total
Pass	$	71,979	$	106,437	$	87,617	$	27,407	$	27,712	$	42,046	$	46,622	$	—	$	409,820
Special Mention		229		1,219		2,822		1,211		3,717		3,040		7,248		—		19,486
Substandard		294		570		1,385		1,933		611		10,382		4,493		—		19,668
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	72,502	$	108,226	$	91,824	$	30,551	$	32,040	$	55,468	$	58,363	$	—	$	448,974

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
December 31, 2022
Commercial and industrial	$	119,353	$	282	$	7,927	$	—	$	1,781	$	129,343
Commercial real estate		220,414		485		8,352		—		2,534		231,785
Construction & land development		40,640		6,655		—		—		8,023		55,318
Total	$	380,407	$	7,422	$	16,279	$	—	$	12,338	$	416,446

NOTE 3 – LOANS (CONTINUED)

The following table presents the amortized cost in residential consumer loans based on payment activity:

	Term Loans Amortized Costs Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior						Total
September 30, 2023
Consumer mortgage:
Performing	$	19,430	$	35,098	$	38,086	$	33,815	$	9,080	$	31,800	$	—	$	—	$	167,309
Nonperforming		—		—		—		—		—		110		—		—		110
Total	$	19,430	$	35,098	$	38,086	$	33,815	$	9,080	$	31,910	$	—	$	—	$	167,419
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction
Performing	$	3,422	$	1,736	$	270	$	576	$	83	$	42	$	—	$	—	$	6,129
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	3,422	$	1,736	$	270	$	576	$	83	$	42	$	—	$	—	$	6,129
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home equity line of credit:
Performing	$	—	$	—	$	—	$	—	$	—	$	—	$	41,046	$	47	$	41,093
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	41,046	$	47	$	41,093
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer installment:
Performing	$	5,410	$	3,476	$	1,187	$	603	$	211	$	208	$	74	$	—	$	11,169
Nonperforming		—		1		17		—		10		—		—		—		28
Total	$	5,410	$	3,477	$	1,204	$	603	$	221	$	208	$	74	$	—	$	11,197
YTD gross charge-offs	$	1	$	11	$	10	$	3	$	2	$	4	$	—	$	—	$	31
Consumer indirect:
Performing	$	760	$	1,219	$	636	$	589	$	643	$	2,295	$	—	$	—	$	6,142
Nonperforming		—		—		—		—		21		5		—		—		26
Total	$	760	$	1,219	$	636	$	589	$	664	$	2,300	$	—	$	—	$	6,168
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	66	$	—	$	—	$	66
Total
Performing	$	29,022	$	41,529	$	40,179	$	35,583	$	10,017	$	34,345	$	41,120	$	47	$	231,842
Nonperforming		—		1		17		—		31		115		—		—		164
Total	$	29,022	$	41,530	$	40,196	$	35,583	$	10,048	$	34,460	$	41,120	$	47	$	232,006

Consumer mortgages are substantially secured by one to four family owner occupied properties and consumer indirect loans are substantially secured by recreational vehicles. All nonperforming consumer loans are evaluated when placed on nonaccrual status and may be charged down based on the fair value less cost to sell if that value is lower than the outstanding balance.

Allowances for Loan Losses and Ending Balances by Portfolio Class and Based on Impairment Method

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio class, based on the impairment method as of December 31, 2022:

(Dollars in thousands)	Commercial and industrial		Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total
December 31, 2022
Allowance for loan losses:
Individually evaluated for    impairment	$	—	$	—	$	—	$	—	$	4	$	—	$	4
Collectively evaluated for    impairment		1,110		2,760		1,268		803		229		664		6,834
Total ending allowance balance	$	1,110	$	2,760	$	1,268	$	803	$	233	$	664	$	6,838
Loans:
Loans individually    evaluated for    impairment	$	123	$	113	$	677	$	—	$	123			$	1,036
Loans collectively    evaluated for    impairment		129,220		231,672		193,448		55,318		16,264				625,922
Total ending loans balance	$	129,343	$	231,785	$	194,125	$	55,318	$	16,387			$	626,958

Schedule of Impairment by Class of Loans

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2022:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total recorded investment1		Related Allowance
December 31, 2022
Commercial and industrial	$	123	$	124	$	—	$	124	$	—
Commercial real estate		117		92		20		112		—
Residential real estate		733		166		518		683		—
Construction & land development		—		—		—		—		—
Consumer		127		6		121		127		4
Total impaired loans	$	1,101	$	387	$	659	$	1,046	$	4

1Includes principal, accrued interest, unearned fees, and origination costs

Schedule of Average Recorded Investment in Impaired Loans and Related Interest Income Recognized

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated.

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
(Dollars in thousands)	2022		2022
Average recorded investment:
Commercial and industrial	$	255	$	258
Commercial real estate		173		198
Residential real estate		715		781
Construction & land development		—		164
Consumer		131		132
Average recorded investment in impaired loans	$	1,274	$	1,533
Interest income recognized:
Commercial and industrial	$	—	$	2
Commercial real estate		2		6
Residential real estate		7		23
Construction & land development		—		—
Consumer		2		6
Interest income recognized on a cash basis on impaired loans	$	11	$	37

XML

Short-Term Borrowings (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Summary of Repurchase Agreements and Related Collateral Accounted for as Secured Borrowings

The following table provides additional detail regarding repurchase agreements and the related collateral accounted for as secured borrowings.

	Remaining Contractual Maturity Overnight and Continuous
	September 30,		December 31,
(Dollars in thousands)	2023		2022
Securities of U.S. Government Agencies and mortgage-backed securities of    government agencies pledged, fair value	$	30,911	$	32,755
Repurchase agreements		30,734		32,550

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Assets Measured on Recurring Basis

The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of September 30, 2023 and December 31, 2022 by level within the fair value hierarchy. No liabilities are carried at fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Equity securities with readily determinable values and U.S. Treasury Notes are valued at the closing price reported on the active market on which the individual securities are traded. Obligations of U.S. government agencies, mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions and corporate bonds are valued at observable market data for similar assets. Equity securities without readily determinable values are carried at amortized cost adjusted for impairment and observable price changes and are not included in the table below.

(Dollars in thousands)	Level I		Level II		Level III		Total
September 30, 2023
Assets:
Securities available-for-sale
U.S. Treasury securities	$	22,458	$	—	$	—	$	22,458
U.S. Government agencies		—		12,848		—		12,848
Mortgage-backed securities of government agencies		—		64,451		—		64,451
Asset-backed securities of government agencies		—		552		—		552
State and political subdivisions		—		18,799		—		18,799
Corporate bonds		—		26,222		—		26,222
Total available-for-sale securities	$	22,458	$	122,872	$	—	$	145,330
Equity securities	$	211	$	—	$	—	$	211
December 31, 2022
Assets:
Securities available-for-sale
U.S. Treasury securities	$	22,225	$	—	$	—	$	22,225
U.S. Government agencies		—		12,630		—		12,630
Mortgage-backed securities of government agencies		—		68,890		—		68,890
Asset-backed securities of government agencies		—		618		—		618
State and political subdivisions		—		19,477		—		19,477
Corporate bonds		—		26,229		—		26,229
Total available-for-sale securities	$	22,225	$	127,844	$	—	$	150,069
Equity securities	$	198	$	—	$	—	$	198

XML

Fair Values of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Investments, All Other Investments [Abstract]

Schedule of Estimated Fair Values of Recognized Financial Instruments Carried at Amortized Cost

The estimated fair values of recognized financial instruments carried at amortized cost as of September 30, 2023 and December 31, 2022 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
September 30, 2023
Financial assets
Securities held-to-maturity	$	230,505	$	9,209	$	178,486	$	—	$	187,695
Loans held for sale		—		—		—		—		—
Net loans		674,258		—		—		640,671		640,671
Mortgage servicing rights		601		—		—		601		601
Financial liabilities
Deposits	$	1,018,075	$	840,637	$	—	$	179,008	$	1,019,645
Other borrowings		1,808		—		—		1,687		1,687
December 31, 2022
Financial assets
Securities held-to-maturity	$	247,401	$	11,617	$	200,337	$	—	$	211,954
Loans held for sale		52		55		—		—		55
Net loans		620,333		—		—		600,720		600,720
Mortgage servicing rights		621		—		—		621		621
Financial liabilities
Deposits	$	1,023,417	$	905,335	$	—	$	114,478	$	1,019,813
Other borrowings		2,461		—		—		2,321		2,321

XML

Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of Changes in Accumulated Other Comprehensive Loss by Component Net of Tax

The following table presents the changes in accumulated other comprehensive loss by component net of tax for the three and nine months ended September 30, 2023 and 2022:

(Dollars in thousands)	Pretax			Tax Effect			After-tax
Three Months Ended September 30, 2023
Balance, beginning of period	$	(16,856	)	$	3,540		$	(13,316	)
Unrealized holding loss on available-for-sale securities arising during    the period		(1,127	)		237			(890	)
Amortization of held-to-maturity discount resulting from transfer		50			(11	)		40
Total other comprehensive loss		(1,077	)		226			(851	)
Balance, end of period	$	(17,933	)	$	3,766		$	(14,167	)
Nine Months Ended September 30, 2023
Balance, beginning of period	$	(16,354	)	$	3,435		$	(12,919	)
Unrealized holding loss on available-for-sale securities arising during    the period		(1,722	)		361			(1,361	)
Amortization of held-to-maturity discount resulting from transfer		143			(30	)		113
Total other comprehensive loss		(1,579	)		331			(1,248	)
Balance, end of period	$	(17,933	)	$	3,766		$	(14,167	)
Three Months ended September 30, 2022
Balance, beginning of period	$	(12,663	)	$	2,660		$	(10,003	)
Unrealized holding loss on available-for-sale securities arising during    the period		(5,189	)		1,090			(4,099	)
Amortization of held-to-maturity discount resulting from transfer		64			(14	)		50
Total other comprehensive loss		(5,125	)		1,076			(4,049	)
Balance, end of period	$	(17,788	)	$	3,736		$	(14,052	)
Nine Months Ended September 30, 2022
Balance, beginning of period	$	(2,691	)	$	566		$	(2,125	)
Unrealized holding loss on available-for-sale securities arising during    the period		(15,334	)		3,220			(12,114	)
Amortization of held-to-maturity discount resulting from transfer		237			(50	)		187
Total other comprehensive loss		(15,097	)		3,170			(11,927	)
Balance, end of period	$	(17,788	)	$	3,736		$	(14,052	)

XML

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)	Sep. 30, 2023	Jun. 30, 2023	Jan. 01, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Summary Of Significant Accounting Policies [Line Items]
Allowance for credit/loan losses	$ 6,691,000	$ 6,559,000		$ 6,838,000	$ 7,008,000	$ 7,268,000	$ 7,618,000
Retained earnings	94,614,000			$ 86,502,000
Allowance for credit losses, available for sale debt securities	0
Held to maturity security, allowance for credit loss	$ 0
Accounting Standards Update 2016-13 [Member]
Summary Of Significant Accounting Policies [Line Items]
Allowance for credit/loan losses			$ 6,279,000
Change in accounting principle, accounting standards update, adoption date	Jan. 01, 2023
Change in accounting principle, accounting standards update, adopted	true
Net of tax related to loans			442,000
Unfunded commitments			390,000
Accounting Standards Update 2016-13 [Member] | Cumulative Effect of Adoption [Memnber]
Summary Of Significant Accounting Policies [Line Items]
Retained earnings			$ 52,000
Accounting Standards Update 2022-02 [Member]
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adoption date	Jan. 01, 2023
Change in accounting principle, accounting standards update, adopted	true
Maximum [Member] | Commercial Loans [Member]
Summary Of Significant Accounting Policies [Line Items]
Allowance for credit/loan losses	$ 500,000

XML

Summary of Significant Accounting Policies - Impact of Change from Incurred Loss Model to Current Expected Credit Loss Model (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Jan. 01, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans	$ 6,691	$ 6,559		$ 6,838	$ 7,008	$ 7,268	$ 7,618
ACL for off-balance sheet commitments	492			141
ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			$ 6,279
ACL for off-balance sheet commitments			493
Total allowance for credit losses			6,772
Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			6,838	6,838
Total allowance for credit losses			6,838
Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			(559)	(559)
ACL for off-balance sheet commitments			493
Total allowance for credit losses			(66)
Commercial and Industrial [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans	1,963	2,119		1,110	1,249	1,213	1,240
Commercial and Industrial [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			1,768
Commercial and Industrial [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			1,110
Commercial and Industrial [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			658
Commercial Real Estate [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans	2,129	1,882		2,760	2,112	2,422	2,838
Commercial Real Estate [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			2,219
Commercial Real Estate [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			2,760
Commercial Real Estate [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			(541)
Commercial Lessors of Buildings [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans	1,226	1,237
Commercial Lessors of Buildings [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			974
Commercial Lessors of Buildings [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			974
Construction [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans	255	283		803
Construction [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			288
Construction [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			803
Construction [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			(515)
Consumer Mortgage [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans	775	714		1,268
Consumer Mortgage [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			688
Consumer Mortgage [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			1,268
Consumer Mortgage [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			(580)
Home Equity Line of Credit [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans	187	178
Home Equity Line of Credit [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			201
Home Equity Line of Credit [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			201
Consumer Installment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans	57	52		233
Consumer Installment [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			50
Consumer Installment [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			233
Consumer Installment [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			(183)
Consumer Indirect [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans	$ 99	$ 94
Consumer Indirect [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			91
Consumer Indirect [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			91
Unallocated [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans				$ 664	$ 814	$ 454	$ 747
Unallocated [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			664
Unallocated [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total allowance for credit losses - loans			$ (664)

XML

Summary of Significant Accounting Policies - Summary of Category of Loans and Impact of Change from Adoption (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Jan. 01, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	$ 680,980			$ 626,958
Allowance for credit/loan losses	(6,691)	$ (6,559)		(6,838)	$ (7,008)	$ (7,268)	$ (7,618)
Net Total Loans	674,258			620,333
ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans			$ 626,958
Deferred loan (fees) costs, net			213
Allowance for credit/loan losses			(6,279)
Net Total Loans			620,892
Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				626,958
Deferred loan (fees) costs, net				213
Allowance for credit/loan losses			(6,838)	(6,838)
Net Total Loans				620,333
Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit/loan losses			559	559
Net Total Loans				559
Commercial and Industrial [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	143,227			129,343
Allowance for credit/loan losses	(1,963)	(2,119)		(1,110)	(1,249)	(1,213)	(1,240)
Commercial and Industrial [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans			127,134
Allowance for credit/loan losses			(1,768)
Commercial and Industrial [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				129,343
Allowance for credit/loan losses			(1,110)
Commercial and Industrial [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				(2,209)
Allowance for credit/loan losses			(658)
Commercial Real Estate [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	188,910			231,785
Allowance for credit/loan losses	(2,129)	(1,882)		(2,760)	$ (2,112)	$ (2,422)	$ (2,838)
Commercial Real Estate [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans			161,160
Allowance for credit/loan losses			(2,219)
Commercial Real Estate [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				231,785
Allowance for credit/loan losses			(2,760)
Commercial Real Estate [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				(70,625)
Allowance for credit/loan losses			541
Commercial Lessors of Buildings [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	78,520
Allowance for credit/loan losses	(1,226)	(1,237)
Commercial Lessors of Buildings [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans			83,728
Allowance for credit/loan losses			(974)
Commercial Lessors of Buildings [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				83,728
Allowance for credit/loan losses			(974)
Construction [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	44,446
Allowance for credit/loan losses	(255)	(283)		(803)
Construction [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans			44,866
Allowance for credit/loan losses			(288)
Construction [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				55,318
Allowance for credit/loan losses			(803)
Construction [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				(10,452)
Allowance for credit/loan losses			515
Consumer Mortgage [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	167,419
Allowance for credit/loan losses	(775)	(714)		(1,268)
Consumer Mortgage [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans			149,787
Allowance for credit/loan losses			(688)
Consumer Mortgage [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				194,125
Allowance for credit/loan losses			(1,268)
Consumer Mortgage [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				(44,338)
Allowance for credit/loan losses			580
Home Equity Line of Credit [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	41,093
Allowance for credit/loan losses	(187)	(178)
Home Equity Line of Credit [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans			44,243
Allowance for credit/loan losses			(201)
Home Equity Line of Credit [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				44,243
Allowance for credit/loan losses			(201)
Consumer Installment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	11,197
Allowance for credit/loan losses	(57)	(52)		(233)
Consumer Installment [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans			9,657
Allowance for credit/loan losses			(50)
Consumer Installment [Member] | Pre-adoption [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				16,387
Allowance for credit/loan losses			(233)
Consumer Installment [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				(6,730)
Allowance for credit/loan losses			183
Consumer Indirect [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans	6,168
Allowance for credit/loan losses	$ (99)	$ (94)
Consumer Indirect [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans			6,383
Allowance for credit/loan losses			(91)
Consumer Indirect [Member] | Cumulative Effect of Adoption [Memnber] | Adoption Impact [Member] | ASU 2016-13 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Loans				$ 6,383
Allowance for credit/loan losses			$ (91)

XML

Securities - Summary of Securities Available-for-Sale and Restricted Stock (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	$ 161,688	$ 164,705
Gross Unrealized Gains, Available-for-sale	2	72
Gross Unrealized Losses, Available-for-sale	(16,360)	(14,708)
Fair Value, Available-for-sale	145,330	150,069
Amortized Cost, Held to maturity	230,505	247,401
Gross Unrealized Gains, Held to maturity		1
Gross Unrealized Losses, Held to maturity	(42,810)	(35,448)
Fair Value, Held to maturity	187,695	211,954
Amortized Cost	393,939	415,721
Gross Unrealized Gains	63	132
Gross Unrealized Losses	(59,170)	(50,156)
Fair Value	334,832	365,697
U.S. Treasury Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	23,133	23,194
Gross Unrealized Losses, Available-for-sale	(675)	(969)
Fair Value, Available-for-sale	22,458	22,225
Amortized Cost, Held to maturity	10,292	12,753
Gross Unrealized Losses, Held to maturity	(1,083)	(1,136)
Fair Value, Held to maturity	9,209	11,617
U.S. Government Agencies [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	13,999	13,999
Gross Unrealized Losses, Available-for-sale	(1,151)	(1,369)
Fair Value, Available-for-sale	12,848	12,630
Mortgage-Backed Securities of Government Agencies [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	74,457	77,677
Gross Unrealized Gains, Available-for-sale	2	72
Gross Unrealized Losses, Available-for-sale	(10,008)	(8,859)
Fair Value, Available-for-sale	64,451	68,890
Amortized Cost, Held to maturity	217,656	232,068
Gross Unrealized Losses, Held to maturity	(41,334)	(34,051)
Fair Value, Held to maturity	176,322	198,017
Asset-Backed Securities of Government Agencies [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	569	633
Gross Unrealized Losses, Available-for-sale	(17)	(15)
Fair Value, Available-for-sale	552	618
State and Political Subdivisions [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	20,372	20,462
Gross Unrealized Losses, Available-for-sale	(1,573)	(985)
Fair Value, Available-for-sale	18,799	19,477
Amortized Cost, Held to maturity	2,557	2,580
Gross Unrealized Gains, Held to maturity		1
Gross Unrealized Losses, Held to maturity	(393)	(261)
Fair Value, Held to maturity	2,164	2,320
Corporate Bonds [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	29,158	28,740
Gross Unrealized Losses, Available-for-sale	(2,936)	(2,511)
Fair Value, Available-for-sale	26,222	26,229
Equity Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Equity securities	185	185
Gross Unrealized Gains, Equity securities	61	59
Fair Value, Equity securities	246	244
Restricted Stock [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost	1,561	3,430
Fair Value	$ 1,561	$ 3,430

XML

Securities - Summary of Amortized Cost and Fair Value of Debt Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Available-for-sale
Due in one year or less, Amortized Cost	$ 15,006
Due after one through five years, Amortized Cost	55,512
Due after five through ten years, Amortized Cost	24,135
Due after ten years, Amortized Cost	67,035
Amortized Cost, Available-for-sale	161,688	$ 164,705
Due in one year or less, Fair Value	14,780
Due after one through five years, Fair Value	51,631
Due after five through ten years, Fair Value	21,304
Due after ten years, Fair Value	57,615
Total debt securities available-for-sale, Fair Value	145,330	150,069
Held-to-maturity
Due after one through five years, Amortized cost	7,434
Due after five through ten years, Amortized Cost	5,138
Due after ten years, Amortized Cost	217,933
Amortized Cost, Held to maturity	230,505	247,401
Due after one through five years, Fair Value	6,876
Due after five through ten years, Fair Value	4,295
Due after ten years, Fair Value	176,524
Total debt securities held-to-maturity, Fair Value	$ 187,695	$ 211,954

XML

Securities - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($) Security $ / shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Security $ / shares	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Debt and Equity Securities, FV-NI [Line Items]
Fair value of pledged securities	$ 129,100,000		$ 129,100,000		$ 110,100,000
Restricted stock investment in FHLB stock	1,000,000		1,000,000		2,900,000
Federal Home Loan Bank redemption of stock	$ 1,900,000		$ 1,900,000
Federal Home Loan Bank redemption par value per share | $ / shares	$ 100		$ 100
Federal Reserve Bank stock	$ 471,000		$ 471,000		471,000
Proceeds from sale of available-for-sale securities	$ 0	$ 0	$ 0	$ 0
Number of securities in an unrealized loss position, Total | Security	203		203
Number of securities in continuous unrealized loss position, 12 months or more | Security			183
Held to maturity security, allowance for credit loss	$ 0		$ 0
Total available-for-sale securities	145,330,000		145,330,000		$ 150,069,000
US Treasury Securities And US Government Sponsored Agency Bonds [Member]
Debt and Equity Securities, FV-NI [Line Items]
Total available-for-sale securities	100,000,000		100,000,000
Non-agency Debt Securities [Member]
Debt and Equity Securities, FV-NI [Line Items]
Total available-for-sale securities	45,000,000		45,000,000
Non-agency Debt Securities [Member] | Non-rated Debt Securities [Member]
Debt and Equity Securities, FV-NI [Line Items]
Total available-for-sale securities	$ 5,000,000		$ 5,000,000

XML

Securities - Summary of Gross Unrealized Losses and Fair Value of Available for Sale Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule of Available-for-sale Securities [Line Items]
Held-to-maturity, Gross Unrealized Losses, Total	$ (42,810)	$ (35,448)
Gross Unrealized Losses, Less Than 12 Months	(692)	(12,931)
Fair Value, Less Than 12 Months	23,665	135,499
Gross Unrealized Losses, 12 Months Or More	(58,478)	(37,225)
Fair Value, 12 Months Or More	308,936	217,374
Gross Unrealized Losses, Total	(59,170)	(50,156)
Fair Value, Total	332,601	352,873
U.S. Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Gross Unrealized Losses, Less Than 12 Months		(798)
Available-for-sale, Fair Value, Less Than 12 Months		17,405
Available-for-sale, Gross Unrealized Losses, 12 Months or More	(675)	(171)
Available-for-sale, Fair Value, 12 Months or More	22,458	4,820
Available-for-sale, Gross Unrealized Losses, Total	(675)	(969)
Available-for-sale, Fair Value, Total	22,458	22,225
Held-to-maturity, Gross Unrealized Losses, 12 Months Or More	(1,083)	(1,136)
Held-to-maturity, Fair Value, 12 Months Or More	9,209	11,617
Held-to-maturity, Gross Unrealized Losses, Total	(1,083)	(1,136)
Held-to-maturity, Fair Value, Total	9,209	11,617
U.S. Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Gross Unrealized Losses, 12 Months or More	(1,151)	(1,369)
Available-for-sale, Fair Value, 12 Months or More	12,848	12,630
Available-for-sale, Gross Unrealized Losses, Total	(1,151)	(1,369)
Available-for-sale, Fair Value, Total	12,848	12,630
Mortgage-Backed Securities of Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Gross Unrealized Losses, Less Than 12 Months	(235)	(1,046)
Available-for-sale, Fair Value, Less Than 12 Months	12,748	16,188
Available-for-sale, Gross Unrealized Losses, 12 Months or More	(9,773)	(7,813)
Available-for-sale, Fair Value, 12 Months or More	51,513	44,519
Available-for-sale, Gross Unrealized Losses, Total	(10,008)	(8,859)
Available-for-sale, Fair Value, Total	64,261	60,707
Held-to-maturity, Gross Unrealized Losses, Less Than 12 Months	(356)	(9,733)
Held-to-maturity, Fair Value, Less Than 12 Months	8,080	79,325
Held-to-maturity, Gross Unrealized Losses, 12 Months Or More	(40,978)	(24,318)
Held-to-maturity, Fair Value, 12 Months Or More	168,233	118,692
Held-to-maturity, Gross Unrealized Losses, Total	(41,334)	(34,051)
Held-to-maturity, Fair Value, Total	176,313	198,017
Asset-Backed Securities of Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Gross Unrealized Losses, 12 Months or More	(17)	(15)
Available-for-sale, Fair Value, 12 Months or More	552	618
Available-for-sale, Gross Unrealized Losses, Total	(17)	(15)
Available-for-sale, Fair Value, Total	552	618
State and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Gross Unrealized Losses, Less Than 12 Months	(79)	(189)
Available-for-sale, Fair Value, Less Than 12 Months	1,952	9,079
Available-for-sale, Gross Unrealized Losses, 12 Months or More	(1,494)	(796)
Available-for-sale, Fair Value, 12 Months or More	16,622	9,848
Available-for-sale, Gross Unrealized Losses, Total	(1,573)	(985)
Available-for-sale, Fair Value, Total	18,574	18,927
Held-to-maturity, Gross Unrealized Losses, Less Than 12 Months	(21)
Held-to-maturity, Fair Value, Less Than 12 Months	393
Held-to-maturity, Gross Unrealized Losses, 12 Months Or More	(372)	(261)
Held-to-maturity, Fair Value, 12 Months Or More	1,771	1,903
Held-to-maturity, Gross Unrealized Losses, Total	(393)	(261)
Held-to-maturity, Fair Value, Total	2,164	1,903
Corporate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Gross Unrealized Losses, Less Than 12 Months	(1)	(1,165)
Available-for-sale, Fair Value, Less Than 12 Months	492	13,502
Available-for-sale, Gross Unrealized Losses, 12 Months or More	(2,935)	(1,346)
Available-for-sale, Fair Value, 12 Months or More	25,730	12,727
Available-for-sale, Gross Unrealized Losses, Total	(2,936)	(2,511)
Available-for-sale, Fair Value, Total	$ 26,222	$ 26,229

XML

Securities - Summary of Amortized Cost of Held-to Maturity Debt Securities Aggregated by Credit Quality Indicator (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Held-to-Maturity, Credit Quality Indicator [Line Items]
Amortized Cost, Held to maturity	$ 230,505	$ 247,401
U.S. Treasury Securities [Member]
Debt Securities, Held-to-Maturity, Credit Quality Indicator [Line Items]
Amortized Cost, Held to maturity	10,292	12,753
U.S. Treasury Securities [Member] | AAA / AA / A [Member]
Debt Securities, Held-to-Maturity, Credit Quality Indicator [Line Items]
Amortized Cost, Held to maturity	10,292
Mortgage-Backed Securities of Government Agencies [Member]
Debt Securities, Held-to-Maturity, Credit Quality Indicator [Line Items]
Amortized Cost, Held to maturity	217,656	232,068
Mortgage-Backed Securities of Government Agencies [Member] | AAA / AA / A [Member]
Debt Securities, Held-to-Maturity, Credit Quality Indicator [Line Items]
Amortized Cost, Held to maturity	217,656
State and Political Subdivisions [Member]
Debt Securities, Held-to-Maturity, Credit Quality Indicator [Line Items]
Amortized Cost, Held to maturity	2,557	$ 2,580
State and Political Subdivisions [Member] | AAA / AA / A [Member]
Debt Securities, Held-to-Maturity, Credit Quality Indicator [Line Items]
Amortized Cost, Held to maturity	$ 2,557

XML

Loans - Summary of Loans (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 680,980		$ 626,958
Allowance for credit/loan losses	(6,691)	$ (6,559)	(6,838)	$ (7,008)	$ (7,268)	$ (7,618)
Deferred loan (fees) costs, net	(31)		213
Net Total Loans	674,258		620,333
Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	143,227		129,343
Allowance for credit/loan losses	(1,963)	(2,119)	(1,110)	(1,249)	(1,213)	(1,240)
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	188,910		231,785
Allowance for credit/loan losses	(2,129)	(1,882)	(2,760)	(2,112)	(2,422)	(2,838)
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans			194,125
Allowance for credit/loan losses				(1,289)	(1,177)	(992)
Commercial Lessors of Buildings [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	78,520
Allowance for credit/loan losses	(1,226)	(1,237)
Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	44,446
Allowance for credit/loan losses	(255)	(283)	(803)
Consumer Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	167,419
Allowance for credit/loan losses	(775)	(714)	(1,268)
Home Equity Line of Credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	41,093
Allowance for credit/loan losses	(187)	(178)
Consumer Installment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	11,197
Allowance for credit/loan losses	(57)	(52)	(233)
Consumer Indirect [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	6,168
Allowance for credit/loan losses	$ (99)	$ (94)
Construction & Land Development [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans			55,318
Allowance for credit/loan losses				(1,276)	(1,607)	(1,380)
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans			$ 16,387
Allowance for credit/loan losses				$ (268)	$ (395)	$ (421)

XML

Loans - Additional Information (Detail)	3 Months Ended	9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Industry	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans serviced for others		$ 132,200,000		$ 137,500,000
Total Loans		680,980,000		626,958,000
Outstanding balance of commercial loans classified under credit risk, minimum amount		500,000
Interest income	$ 11,000		$ 37,000
Consumer Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans		167,419,000
Interest income recognized on nonaccrual loans		22,000
Interest income on amortized cost basis		0
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans		188,910,000		$ 231,785,000
Interest income	$ 2,000		$ 6,000
Interest income recognized on nonaccrual loans		$ 1,000
Credit Concentration Risk [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of industries for credit concentrations | Industry		2
Credit Concentration Risk [Member] | Loans Receivable [Member] | Lessors of Non-residential Buildings [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans		$ 62,900,000
Concentration of credit percentage of total loans		9.00%
Credit Concentration Risk [Member] | Loans Receivable [Member] | Manufacturers of Animal Food [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans		$ 39,600,000
Concentration of credit percentage of total loans		6.00%

XML

Loans - Schedule of Allowance for Credit Losses by Portfolio Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	$ 6,559	$ 7,268	$ 6,838	$ 7,618
Provisions (Recovery)	13	(250)	287	(895)
Charge-offs	(43)	(29)	(97)	(71)
Recoveries	162	19	222	356
Net (charge-offs) recoveries		(10)		285
Ending Balance	6,691	7,008	6,691	7,008
Impact of Adopting ASC 326 [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance			(559)
Commercial and Industrial [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	2,119	1,213	1,110	1,240
Provisions (Recovery)	(303)	45	29	30
Charge-offs		(13)		(31)
Recoveries	147	4	166	10
Net (charge-offs) recoveries		(9)		(21)
Ending Balance	1,963	1,249	1,963	1,249
Commercial and Industrial [Member] | Impact of Adopting ASC 326 [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance			658
Commercial Real Estate [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	1,882	2,422	2,760	2,838
Provisions (Recovery)	239	(298)	(99)	(715)
Charge-offs		(12)		(12)
Recoveries	8		9	1
Net (charge-offs) recoveries		(12)		(11)
Ending Balance	2,129	2,112	2,129	2,112
Commercial Real Estate [Member] | Impact of Adopting ASC 326 [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance			(541)
Residential Real Estate [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance		1,177		992
Provisions (Recovery)		111		295
Recoveries		1		2
Net (charge-offs) recoveries		1		2
Ending Balance		1,289		1,289
Construction & Land Development [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance		1,607		1,380
Provisions (Recovery)		(331)		(416)
Recoveries				312
Net (charge-offs) recoveries				312
Ending Balance		1,276		1,276
Consumer [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance		395		421
Provisions (Recovery)		(137)		(156)
Charge-offs		(4)		(28)
Recoveries		14		31
Net (charge-offs) recoveries		10		3
Ending Balance		268		268
Commercial Lessors of Buildings [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	1,237
Provisions (Recovery)	(11)		252
Ending Balance	1,226		1,226
Commercial Lessors of Buildings [Member] | Impact of Adopting ASC 326 [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance			974
Construction [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	283		803
Provisions (Recovery)	(28)		(33)
Ending Balance	255		255
Construction [Member] | Impact of Adopting ASC 326 [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance			(515)
Consumer Mortgage [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	714		1,268
Provisions (Recovery)	61		86
Recoveries			1
Ending Balance	775		775
Consumer Mortgage [Member] | Impact of Adopting ASC 326 [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance			(580)
Home Equity Line of Credit [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	178
Provisions (Recovery)	9		(14)
Ending Balance	187		187
Home Equity Line of Credit [Member] | Impact of Adopting ASC 326 [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance			201
Consumer Installment [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	52		233
Provisions (Recovery)	13		26
Charge-offs	(8)		(31)
Recoveries			12
Ending Balance	57		57
Consumer Installment [Member] | Impact of Adopting ASC 326 [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance			(183)
Consumer Indirect [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	94
Provisions (Recovery)	33		40
Charge-offs	(35)		(66)
Recoveries	7		34
Ending Balance	$ 99		99
Consumer Indirect [Member] | Impact of Adopting ASC 326 [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance			91
Unallocated [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance		454	664	747
Provisions (Recovery)		360		67
Ending Balance		$ 814		$ 814
Unallocated [Member] | Impact of Adopting ASC 326 [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance			$ (664)

XML

Loans - Schedule of Aging of Past Due of Accruing and Nonaccrual Loans (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 680,980	$ 626,958
Non-accrual	248	256
Total past due and non-accrual		824
Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	679,634	626,134
30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,252	300
60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	82	268
90 Days Plus Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	12
Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,346
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	143,227	129,343
Non-accrual	17
Total past due and non-accrual		73
Commercial and Industrial [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	143,026	129,270
Commercial and Industrial [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	184	70
Commercial and Industrial [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	17	3
Commercial and Industrial [Member] | Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	201
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	188,910	231,785
Non-accrual	79	92
Total past due and non-accrual		92
Commercial Real Estate [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	188,576	231,693
Commercial Real Estate [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	334
Commercial Real Estate [Member] | Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	334
Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		194,125
Non-accrual		99
Total past due and non-accrual		331
Residential Real Estate [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		193,794
Residential Real Estate [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		95
Residential Real Estate [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		137
Construction & Land Development [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		55,318
Total past due and non-accrual		32
Construction & Land Development [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		55,286
Construction & Land Development [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		32
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		16,387
Non-accrual		65
Total past due and non-accrual		296
Consumer [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		16,091
Consumer [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		103
Consumer [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans		$ 128
Commercial Lessors of Buildings [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	78,520
Commercial Lessors of Buildings [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	78,520
Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	44,446
Construction [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	44,446
Consumer Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	167,419
Non-accrual	110
Consumer Mortgage [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	166,980
Consumer Mortgage [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	394
Consumer Mortgage [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	45
Consumer Mortgage [Member] | Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	439
Home Equity Line of Credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	41,093
Home Equity Line of Credit [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	40,874
Home Equity Line of Credit [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	219
Home Equity Line of Credit [Member] | Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	219
Consumer Installment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	11,197
Non-accrual	16
Consumer Installment [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	11,044
Consumer Installment [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	121
Consumer Installment [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	20
Consumer Installment [Member] | 90 Days Plus Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	12
Consumer Installment [Member] | Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	153
Consumer Indirect [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	6,168
Non-accrual	26
Consumer Indirect [Member] | Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 6,168

XML

Loans - Schedule of Amortized Cost Basis Of Loans On Nonaccrual Status And Loans Past Due Over 90 Days Still Accruing Interest (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with no ACL	$ 248
Total Nonaccrual	248	$ 256
Loans Past Due Over 90 Days Still Accruing	12
Total Nonperforming	260
Commercial and Industrial [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with no ACL	17
Total Nonaccrual	17
Total Nonperforming	17
Commercial Real Estate [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with no ACL	79
Total Nonaccrual	79	$ 92
Total Nonperforming	79
Consumer Mortgage [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with no ACL	110
Total Nonaccrual	110
Total Nonperforming	110
Consumer Installment [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with no ACL	16
Total Nonaccrual	16
Loans Past Due Over 90 Days Still Accruing	12
Total Nonperforming	28
Consumer Indirect [Member]
Financing Receivable, Nonaccrual [Line Items]
Nonaccrual with no ACL	26
Total Nonaccrual	26
Total Nonperforming	$ 26

XML

Loans - Schedule of the Credit Quality Indicators Recorded Investment in Non-homogeneous Loans by Internal Risk Rating System (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Recorded Investment [Line Items]
Total	$ 680,980	$ 626,958
Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	72,502
2022	108,226
2021	91,824
2020	30,551
2019	32,040
Prior	55,468
Revolving Loans Amortized Cost Basis	58,363
Total	448,974
Pass [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	71,979
2022	106,437
2021	87,617
2020	27,407
2019	27,712
Prior	42,046
Revolving Loans Amortized Cost Basis	46,622
Total	409,820
Special Mention [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	229
2022	1,219
2021	2,822
2020	1,211
2019	3,717
Prior	3,040
Revolving Loans Amortized Cost Basis	7,248
Total	19,486
Substandard [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	294
2022	570
2021	1,385
2020	1,933
2019	611
Prior	10,382
Revolving Loans Amortized Cost Basis	4,493
Total	19,668
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	143,227	129,343
Commercial and Industrial [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	21,975
2022	27,716
2021	15,001
2020	6,919
2019	4,207
Prior	10,122
Revolving Loans Amortized Cost Basis	57,287
Total	143,227
Commercial and Industrial [Member] | Pass [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	21,665
2022	27,127
2021	13,867
2020	5,840
2019	4,057
Prior	8,540
Revolving Loans Amortized Cost Basis	45,546
Total	126,642
Commercial and Industrial [Member] | Special Mention [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	16
2022	19
2021	651
2020	178
2019	90
Prior	352
Revolving Loans Amortized Cost Basis	7,248
Total	8,554
Commercial and Industrial [Member] | Substandard [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	294
2022	570
2021	483
2020	901
2019	60
Prior	1,230
Revolving Loans Amortized Cost Basis	4,493
Total	8,031
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	188,910	$ 231,785
Commercial Real Estate [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	20,862
2022	37,342
2021	58,884
2020	15,174
2019	20,244
Prior	35,709
Revolving Loans Amortized Cost Basis	695
Total	188,910
Commercial Real Estate [Member] | Pass [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	20,649
2022	36,877
2021	57,330
2020	14,776
2019	19,773
Prior	24,035
Revolving Loans Amortized Cost Basis	695
Total	174,135
Commercial Real Estate [Member] | Special Mention [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	213
2022	465
2021	652
2020	398
Prior	2,688
Total	4,416
Commercial Real Estate [Member] | Substandard [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2021	902
2019	471
Prior	8,986
Total	10,359
Commercial Lessors of Buildings [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	78,520
Commercial Lessors of Buildings [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	13,317
2022	23,384
2021	17,334
2020	7,515
2019	7,221
Prior	9,368
Revolving Loans Amortized Cost Basis	381
Total	78,520
Commercial Lessors of Buildings [Member] | Pass [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	13,317
2022	22,938
2021	15,821
2020	6,516
2019	3,594
Prior	9,202
Revolving Loans Amortized Cost Basis	381
Total	71,769
Commercial Lessors of Buildings [Member] | Special Mention [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2022	446
2021	1,513
2019	3,627
Total	5,586
Commercial Lessors of Buildings [Member] | Substandard [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2020	999
Prior	166
Total	1,165
Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	44,446
Construction [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	16,348
2022	19,784
2021	605
2020	943
2019	368
Prior	269
Total	38,317
Construction [Member] | Pass [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2023	16,348
2022	19,495
2021	599
2020	275
2019	288
Prior	269
Total	37,274
Construction [Member] | Special Mention [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2022	289
2021	6
2020	635
Total	930
Construction [Member] | Substandard [Member] | Non-Homogeneous Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
2020	33
2019	80
Total	$ 113

XML

Loans - Summary of Loans by Credit Quality Indicator (Detail) $ in Thousands	Dec. 31, 2022 USD ($)
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 416,446
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	380,407
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,422
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	16,279
Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	12,338
Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	129,343
Commercial and Industrial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	119,353
Commercial and Industrial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	282
Commercial and Industrial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,927
Commercial and Industrial [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,781
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	231,785
Commercial Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	220,414
Commercial Real Estate [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	485
Commercial Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	8,352
Commercial Real Estate [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,534
Construction & Land Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	55,318
Construction & Land Development [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	40,640
Construction & Land Development [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,655
Construction & Land Development [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 8,023

XML

Loans - Schedule of the Credit Quality Indicators Amortized Cost in Residential Consumer Loans Based on Payment Activity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Financing Receivable Recorded Investment [Line Items]
Total YTD gross charge-offs	$ 43	$ 29	$ 97	$ 71
Total	680,980		680,980		$ 626,958
Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2023	29,022		29,022
2022	41,530		41,530
2021	40,196		40,196
2020	35,583		35,583
2019	10,048		10,048
Prior	34,460		34,460
Revolving Loans Amortized Cost Basis	41,120		41,120
Revolving Loans Converted to Term	47		47
Total	232,006		232,006
Performing [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2023	29,022		29,022
2022	41,529		41,529
2021	40,179		40,179
2020	35,583		35,583
2019	10,017		10,017
Prior	34,345		34,345
Revolving Loans Amortized Cost Basis	41,120		41,120
Revolving Loans Converted to Term	47		47
Total	231,842		231,842
Nonperforming Financial Instruments [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2022	1		1
2021	17		17
2019	31		31
Prior	115		115
Total	164		164
Consumer Mortgage [Member]
Financing Receivable Recorded Investment [Line Items]
Total	167,419		167,419
Consumer Mortgage [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2023	19,430		19,430
2022	35,098		35,098
2021	38,086		38,086
2020	33,815		33,815
2019	9,080		9,080
Prior	31,910		31,910
Total	167,419		167,419
Consumer Mortgage [Member] | Performing [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2023	19,430		19,430
2022	35,098		35,098
2021	38,086		38,086
2020	33,815		33,815
2019	9,080		9,080
Prior	31,800		31,800
Total	167,309		167,309
Consumer Mortgage [Member] | Nonperforming Financial Instruments [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Prior	110		110
Total	110		110
Construction [Member]
Financing Receivable Recorded Investment [Line Items]
Total	44,446		44,446
Construction [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2023	3,422		3,422
2022	1,736		1,736
2021	270		270
2020	576		576
2019	83		83
Prior	42		42
Total	6,129		6,129
Construction [Member] | Performing [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2023	3,422		3,422
2022	1,736		1,736
2021	270		270
2020	576		576
2019	83		83
Prior	42		42
Total	6,129		6,129
Home Equity Line of Credit [Member]
Financing Receivable Recorded Investment [Line Items]
Total	41,093		41,093
Home Equity Line of Credit [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Revolving Loans Amortized Cost Basis	41,046		41,046
Revolving Loans Converted to Term	47		47
Total	41,093		41,093
Home Equity Line of Credit [Member] | Performing [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
Revolving Loans Amortized Cost Basis	41,046		41,046
Revolving Loans Converted to Term	47		47
Total	41,093		41,093
Consumer Installment [Member]
Financing Receivable Recorded Investment [Line Items]
Total YTD gross charge-offs	8		31
Total	11,197		11,197
Consumer Installment [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2023	5,410		5,410
2022	3,477		3,477
2021	1,204		1,204
2020	603		603
2019	221		221
Prior	208		208
2023 YTD gross charge-offs			1
2022 YTD gross charge-offs			11
2021 YTD gross charge-offs			10
2020 YTD gross charge-offs			3
2019 YTD gross charge-offs			2
Prior YTD gross charge-offs			4
Total YTD gross charge-offs			31
Revolving Loans Amortized Cost Basis	74		74
Total	11,197		11,197
Consumer Installment [Member] | Performing [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2023	5,410		5,410
2022	3,476		3,476
2021	1,187		1,187
2020	603		603
2019	211		211
Prior	208		208
Revolving Loans Amortized Cost Basis	74		74
Total	11,169		11,169
Consumer Installment [Member] | Nonperforming Financial Instruments [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2022	1		1
2021	17		17
2019	10		10
Total	28		28
Consumer Indirect [Member]
Financing Receivable Recorded Investment [Line Items]
Total YTD gross charge-offs	35		66
Total	6,168		6,168
Consumer Indirect [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2023	760		760
2022	1,219		1,219
2021	636		636
2020	589		589
2019	664		664
Prior	2,300		2,300
Prior YTD gross charge-offs			66
Total YTD gross charge-offs			66
Total	6,168		6,168
Consumer Indirect [Member] | Performing [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2023	760		760
2022	1,219		1,219
2021	636		636
2020	589		589
2019	643		643
Prior	2,295		2,295
Total	6,142		6,142
Consumer Indirect [Member] | Nonperforming Financial Instruments [Member] | Residential Consumer Loans [Member]
Financing Receivable Recorded Investment [Line Items]
2019	21		21
Prior	5		5
Total	$ 26		$ 26

XML

Loans - Allowances for Loan Losses and Ending Balances by Portfolio Class and Based on Impairment Method (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses individually evaluated for impairment		$ 4
Allowance for loan losses collectively evaluated for impairment		6,834
Total ending allowance balance	$ 6,691	6,838
Loans individually evaluated for impairment		1,036
Loans collectively evaluated for impairment		625,922
Total ending loans balance		626,958
Commercial and Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses collectively evaluated for impairment		1,110
Total ending allowance balance		1,110
Loans individually evaluated for impairment		123
Loans collectively evaluated for impairment		129,220
Total ending loans balance		129,343
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses collectively evaluated for impairment		2,760
Total ending allowance balance		2,760
Loans individually evaluated for impairment		113
Loans collectively evaluated for impairment		231,672
Total ending loans balance		231,785
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses collectively evaluated for impairment		1,268
Total ending allowance balance		1,268
Loans individually evaluated for impairment		677
Loans collectively evaluated for impairment		193,448
Total ending loans balance		194,125
Construction & Land Development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses collectively evaluated for impairment		803
Total ending allowance balance		803
Loans collectively evaluated for impairment		55,318
Total ending loans balance		55,318
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses individually evaluated for impairment		4
Allowance for loan losses collectively evaluated for impairment		229
Total ending allowance balance		233
Loans individually evaluated for impairment		123
Loans collectively evaluated for impairment		16,264
Total ending loans balance		16,387
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses collectively evaluated for impairment		664
Total ending allowance balance		$ 664

XML

Loans - Schedule of Impairment by Class of Loans (Detail) $ in Thousands	Dec. 31, 2022 USD ($)
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 1,101
Recorded Investment with no Allowance	387
Recorded Investment with Allowance	659
Total recorded investment	1,046
Related Allowance	4
Commercial and Industrial [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	123
Recorded Investment with no Allowance	124
Total recorded investment	124
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	117
Recorded Investment with no Allowance	92
Recorded Investment with Allowance	20
Total recorded investment	112
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	733
Recorded Investment with no Allowance	166
Recorded Investment with Allowance	518
Total recorded investment	683
Consumer [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	127
Recorded Investment with no Allowance	6
Recorded Investment with Allowance	121
Total recorded investment	127
Related Allowance	$ 4

XML

Loans - Schedule of Average Recorded Investment in Impaired Loans and Related Interest Income Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Average recorded investment:
Average recorded investment in impaired loans	$ 1,274	$ 1,533
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	11	37
Commercial and Industrial [Member]
Average recorded investment:
Average recorded investment in impaired loans	255	258
Interest income recognized:
Interest income recognized on a cash basis on impaired loans		2
Commercial Real Estate [Member]
Average recorded investment:
Average recorded investment in impaired loans	173	198
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	2	6
Residential Real Estate [Member]
Average recorded investment:
Average recorded investment in impaired loans	715	781
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	7	23
Construction & Land Development [Member]
Average recorded investment:
Average recorded investment in impaired loans		164
Consumer [Member]
Average recorded investment:
Average recorded investment in impaired loans	131	132
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	$ 2	$ 6

XML

Short-Term Borrowings - Summary of Repurchase Agreements and Related Collateral Accounted for as Secured Borrowings (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Short-Term Debt [Abstract]
Securities of U.S. Government Agencies and mortgage-backed securities of government agencies pledged, fair value	$ 30,911	$ 32,755
Repurchase agreements	$ 30,734	$ 32,550

XML

Fair Value Measurements - Additional Information (Detail) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Liabilities carried at fair value	$ 0	$ 0
Fair Value, Measurements, Nonrecurring [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Total Assets	$ 0	$ 0

XML

Fair Value Measurements - Schedule of Fair Value of Assets Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	$ 145,330	$ 150,069
Equity securities	246	244
U.S. Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	22,458	22,225
U.S. Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	12,848	12,630
Mortgage-Backed Securities of Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	64,451	68,890
Asset-Backed Securities of Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	552	618
State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	18,799	19,477
Corporate Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	26,222	26,229
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	145,330	150,069
Equity securities	211	198
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	22,458	22,225
Fair Value, Measurements, Recurring [Member] | U.S. Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	12,848	12,630
Fair Value, Measurements, Recurring [Member] | Mortgage-Backed Securities of Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	64,451	68,890
Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities of Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	552	618
Fair Value, Measurements, Recurring [Member] | State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	18,799	19,477
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	26,222	26,229
Fair Value, Measurements, Recurring [Member] | Level I [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	22,458	22,225
Equity securities	211	198
Fair Value, Measurements, Recurring [Member] | Level I [Member] | U.S. Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	22,458	22,225
Fair Value, Measurements, Recurring [Member] | Level II [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	122,872	127,844
Fair Value, Measurements, Recurring [Member] | Level II [Member] | U.S. Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	12,848	12,630
Fair Value, Measurements, Recurring [Member] | Level II [Member] | Mortgage-Backed Securities of Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	64,451	68,890
Fair Value, Measurements, Recurring [Member] | Level II [Member] | Asset-Backed Securities of Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	552	618
Fair Value, Measurements, Recurring [Member] | Level II [Member] | State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	18,799	19,477
Fair Value, Measurements, Recurring [Member] | Level II [Member] | Corporate Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total available-for-sale securities	$ 26,222	$ 26,229

XML

Fair Values of Financial Instruments - Schedule of Estimated Fair Values of Recognized Financial Instruments Carried at Amortized Cost (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financial assets
Securities held-to-maturity	$ 187,695	$ 211,954
Loans held for sale		52
Carrying Value [Member]
Financial assets
Securities held-to-maturity	230,505	247,401
Loans held for sale		52
Net loans	674,258	620,333
Financial liabilities
Deposits	1,018,075	1,023,417
Other borrowings	1,808	2,461
Carrying Value [Member] | Mortgage Servicing Rights [Member]
Financial assets
Mortgage servicing rights	601	621
Fair Value [Member]
Financial assets
Securities held-to-maturity	187,695	211,954
Loans held for sale		55
Net loans	640,671	600,720
Financial liabilities
Deposits	1,019,645	1,019,813
Other borrowings	1,687	2,321
Fair Value [Member] | Mortgage Servicing Rights [Member]
Financial assets
Mortgage servicing rights	601	621
Fair Value [Member] | Level I [Member]
Financial assets
Securities held-to-maturity	9,209	11,617
Loans held for sale		55
Financial liabilities
Deposits	840,637	905,335
Fair Value [Member] | Level II [Member]
Financial assets
Securities held-to-maturity	178,486	200,337
Fair Value [Member] | Level III [Member]
Financial assets
Net loans	640,671	600,720
Financial liabilities
Deposits	179,008	114,478
Other borrowings	1,687	2,321
Fair Value [Member] | Level III [Member] | Mortgage Servicing Rights [Member]
Financial assets
Mortgage servicing rights	$ 601	$ 621

XML

Fair Values of Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Commitments to extend credit and letters of credit	$ 301	$ 268

XML

Accumulated Other Comprehensive Loss - Schedule of Changes in Accumulated Other Comprehensive Loss by Component Net of Tax (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accumulated Other Comprehensive Loss [Line Items]
Unrealized holding loss on available-for-sale securities arising during the period, Pretax	$ (1,127)	$ (5,189)	$ (1,722)	$ (15,334)
Beginning balance, After-tax			(12,919)
Other comprehensive loss	(851)	(4,049)	(1,248)	(11,927)
Ending Balance, After-tax	(14,167)		(14,167)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated Other Comprehensive Loss [Line Items]
Beginning balance, Pretax	(16,856)	(12,663)	(16,354)	(2,691)
Unrealized holding loss on available-for-sale securities arising during the period, Pretax	(1,127)	(5,189)	(1,722)	(15,334)
Amortization of held-to-maturity discount resulting from transfer, Pretax	50	64	143	237
Total other comprehensive loss, Pretax	(1,077)	(5,125)	(1,579)	(15,097)
Ending balance, Pretax	(17,933)	(17,788)	(17,933)	(17,788)
Beginning balance, Tax Effect	3,540	2,660	3,435	566
Unrealized holding loss on available-for-sale securities arising during the period, Tax Effect	237	1,090	361	3,220
Amortization of held-to-maturity discount resulting from transfer, Tax Effect	(11)	(14)	(30)	(50)
Total other comprehensive loss, Tax Effect	226	1,076	331	3,170
Ending Balance, Tax Effect	3,766	3,736	3,766	3,736
Beginning balance, After-tax	(13,316)	(10,003)	(12,919)	(2,125)
Unrealized holding loss on available-for-sale securities arising during the period, After-Tax	(890)	(4,099)	(1,361)	(12,114)
Amortization of held-to-maturity discount resulting from transfer, After-tax	40	50	113	187
Other comprehensive loss	(851)	(4,049)	(1,248)	(11,927)
Ending Balance, After-tax	$ (14,167)	$ (14,052)	$ (14,167)	$ (14,052)