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Loans and Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2023
Loans and Allowance for Credit Losses [Abstract]  
Loans and Allowance for Credit Losses

Note C - Loans and Allowance for Credit Losses
Loans are comprised of the following at December 31:

   
2023
   
2022
 
Residential real estate
  
$
319,504
    
$
297,036
  
Commercial real estate:
                
Owner-occupied
    
82,356
      
72,719
  
Nonowner-occupied
    
178,201
      
182,831
  
Construction
    
62,337
      
33,205
  
Commercial and industrial
    
157,298
      
151,232
  
Consumer:
                
Automobile
    
61,461
      
54,837
  
Home equity
    
35,893
      
27,791
  
Other
    
74,850
      
65,398
  
     
971,900
      
885,049
  
Less: Allowance for credit losses
    
(8,767
)
    
(5,269
)
                 
Loans, net
  
$
963,133
    
$
879,780
  


At December 31, 2023 and 2022, net deferred loan origination costs were $794 and $663, respectively. At December 31, 2023 and 2022, net unamortized loan purchase premiums were $687 and $1,142, respectively.



The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of December 31, 2023 and 2022:
December 31, 2023  
Loans Past
Due
90 Days And
Still Accruing
    
Nonaccrual
Loans With
No ACL
   
Nonaccrual
Loans With
an ACL
   
Total
Nonaccrual
Loans
  
                       
Residential real estate
 
$
9
     $ —     $ 1,234    
$
1,234
  
Commercial real estate:
                                
Owner-occupied
    
—
       775       —      
775
  
Nonowner-occupied
    
—
       —       61      
61
  
Construction
   
—
       —       1      
1
  
Commercial and industrial
    
—
       —       48      
48
  
Consumer:
                                
Automobile
    
56
       —       78      
78
  
Home equity
    
—
       —       95      
95
  
Other
    
54
       —       100      
100
  
Total
  
$
119
     $ 775     $ 1,617    
$
2,392
  

December 31, 2022  
Loans Past
Due 90 Days
And Still
Accruing
    
Nonaccrual
  
           
Residential real estate
 
$
100
    
$
1,708
  
Commercial real estate:
                
Owner-occupied
    
—
      
938
  
Nonowner-occupied
    
—
      
70
  
Construction
   
—
      
75
  
Commercial and industrial
    
—
      
150
  
Consumer:
                
Automobile
    
27
      
82
  
Home equity
    
—
      
151
  
Other
    
411
      
59
  
Total
  
$
538
    
$
3,233
  



The Company recognized $146 of interest income in nonaccrual loans during the year ended December 31, 2023.



The following table presents the aging of the recorded investment of past due loans by class of loans as of December 31, 2023 and 2022:
December 31, 2023
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 Days
Or More
Past Due
    
Total
Past Due
    
Loans Not
Past Due
    
Total
  
Residential real estate
  
$
2,705
    
$
368
    
$
481
    
$
3,554
    
$
315,950
    
$
319,504
  
Commercial real estate:
                                                
Owner-occupied
    
2,580
      
—
      
775
      
3,355
      
79,001
      
82,356
  
Nonowner-occupied
    
681
      
—
      
—
      
681
      
177,520
      
178,201
  
Construction
    
—
      
—
      
—
      
—
      
62,337
      
62,337
  
Commercial and industrial
   
3,338
      
—
      
48
      
3,386
      
153,912
      
157,298
  
Consumer:
                                                
Automobile
    
782
      
210
      
117
      
1,109
      
60,352
      
61,461
  
Home equity
    
353
      
62
      
95
      
510
      
35,383
      
35,893
  
Other
    
658
      
121
      
148
      
927
      
73,923
      
74,850
  
                                                 
Total
  
$
11,097
    
$
761
    
$
1,664
    
$
13,522
    
$
958,378
    
$
971,900
  


December 31, 2022
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 Days
Or More
Past Due
    
Total
Past Due
    
Loans Not
Past Due
    
Total
  
Residential real estate
  
$
1,799
    
$
701
    
$
497
    
$
2,997
    
$
294,039
    
$
297,036
  
Commercial real estate:
                                                
Owner-occupied
    
97
      
—
      
938
      
1,035
      
71,684
      
72,719
  
Nonowner-occupied
    
626
      
5
      
—
      
631
      
182,200
      
182,831
  
Construction
    
40
      
45
      
17
      
102
      
33,103
      
33,205
  
Commercial and industrial
   
21
      
—
      
150
      
171
      
151,061
      
151,232
  
Consumer:
                                                
Automobile
    
804
      
240
      
97
      
1,141
      
53,696
      
54,837
  
Home equity
    
204
      
—
      
151
      
355
      
27,436
      
27,791
  
Other
    
875
      
113
      
452
      
1,440
      
63,958
      
65,398
  
                                                 
Total
  
$
4,466
    
$
1,104
    
$
2,302
    
$
7,872
    
$
877,177
    
$
885,049
  


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. These risk categories are represented by a loan grading scale from 1 through 11. The Company analyzes loans individually with a higher credit risk rating and groups these loans into categories called “criticized” and “classified” assets. The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be loans that are graded 9 through 11. The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed $1,000.


The Company uses the following definitions for its criticized loan risk ratings:


Special Mention.  Loans classified as “special mention” indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency.  These loans will be under constant supervision, are not classified and do not expose the institution to sufficient risks to warrant classification.  These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies.  These loans are considered bankable assets with no apparent loss of principal or interest envisioned.  The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted.


The Company uses the following definitions for its classified loan risk ratings:


Substandard.  Loans classified as “substandard” represent very high risk, serious delinquency, nonaccrual, or unacceptable credit. Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well-defined weaknesses, and the collateral pledged may inadequately protect collection of the loans. Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness. Loans are still considered collectible, although loss of principal is more likely than with special mention loans. Collateral liquidation is considered likely to satisfy debt.

Doubtful.  Loans classified as “doubtful” display a high probability of loss, although the amount of actual loss at the time of classification is undetermined. This classification should be temporary until such time that actual loss can be identified, or improvements are made to reduce the seriousness of the classification. These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable. This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonable specific pending factors that may strengthen the credit can be more accurately determined. These factors may include proposed acquisitions, liquidation procedures, capital injection, receipt of additional collateral, mergers, or refinancing plans. A doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded substandard.

Loss.  Loans classified as “loss” are considered uncollectible and are of such little value that their continuance as bankable assets is not warranted.  This classification does not mean that the credit has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset yielding such a minimum value even though partial recovery may be affected in the future.  Amounts classified as loss should be promptly charged off.


As of December 31, 2023 and 2022, and based on the most recent analysis performed, the risk category of commercial loans by class of loans was as follows:

 
Term Loans Amortized Cost Basis by Origination Year
        
December 31, 2023
2023
  
2022
  
2021
  
2020
  
2019
  
Prior
  
Revolving
Loans
Amortized
Cost Basis
  
Total
  
                                 
Commercial real estate:
                                
Owner-occupied
                                
Risk Rating
                                
Pass
  
$
18,120
    
$
7,911
    
$
10,679
    
$
5,973
    
$
6,125
    
$
15,925
    
$
459
    
$
65,192
  
Special Mention
    
—
      
—
      
—
      
—
       —      
427
      
—
      
427
  
Substandard
    
—
       —      
13,934
      
—
      
498
      
2,005
      
300
      
16,737
  
Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Total
  
$
18,120
    
$
7,911
    
$
24,613
    
$
5,973
    
$
6,623
    
$
18,357
    
$
759
    
$
82,356
  
                                                                 
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  

 
Term Loans Amortized Cost Basis by Origination Year
  
     
December 31, 2023
2023
  
2022
  
2021
  
2020
  
2019
  
Prior
  
Revolving
Loans
Amortized
Cost Basis
  
Total
  
                                 
Commercial real estate:
                               
Nonowner occupied
                               
Risk Rating
                                
Pass
  
$
12,688
    
$
29,344
    
$
32,235
    
$
20,484
    
$
15,415
    
$
61,809
    
$
1,128
    
$
173,103
  
Special Mention
    
—
      
—
      
768
      
3,226
      
—
      
1,034
      
—
      
5,028
  
Substandard
    
—
       —      
70
       —      
—
       —      
—
      
70
  
Doubtful
    
—
      
—
      
—
      
—
      
—
      
—
      
—
       —  
Total
  
$
12,688
    
$
29,344
    
$
33,073
    
$
23,710
    
$
15,415
    
$
62,843
    
$
1,128
    
$
178,201
  
                                                                 
Current Period gross charge-offs
  
$
 —    
$
 —    
$
132
    
$
—
    
$
—
    
$
—
    
$
 —    
$
132
  

 
Term Loans Amortized Cost Basis by Origination Year
  
     
December 31, 2023
2023
  
2022
  
2021
  
2020
  
2019
  
Prior
  
Revolving
Loans
Amortized
Cost Basis
  
Total
  
                                 
Commercial real estate:
                               
Construction
                               
Risk Rating
                                
Pass
  
$
28,055
    
$
29,174
    
$
1,231
    
$
302
    
$
392
    
$
2,937
    
$
 —    
$
62,091
  
Special Mention
    
—
      
—
       —      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
       —      
—
      
—
      
—
      
246
       —      
246
  
Doubtful
    
—
      
—
       —      
—
      
—
      
—
       —      
—
  
Total
  
$
28,055
    
$
29,174
    
$
1,231
    
$
302
    
$
392
    
$
3,183
    
$
—
    
$
62,337
  
                                                                 
Current Period gross charge-offs
  
$
 —    
$
 —    
$
—
    
$
—
    
$
 —    
$
—
    
$
—
    
$
 —  

 
Term Loans Amortized Cost Basis by Origination Year
        
December 31, 2023
2023
  
2022
  
2021
  
2020
  
2019
  
Prior
  
Revolving
Loans
Amortized
Cost Basis
  
Total
  
                                 
Commercial and Industrial
                                
Risk Rating
                                
Pass
  
$
8,770
    
$
30,885
    
$
26,806
    
$
31,247
    
$
344
    
$
27,632
    
$
27,510
    
$
153,194
  
Special Mention
    
140
      
—
      
—
       —       —      
8
      
66
      
214
  
Substandard
    
—
       —      
58
      
1,363
      
4
      
182
      
2,283
      
3,890
  
Doubtful
    
—
      
—
      
—
      
—
      
—
       —      
—
      
—
  
Total
  
$
8,910
    
$
30,885
    
$
26,864
    
$
32,610
    
$
348
    
$
27,822
    
$
29,859
    
$
157,298
  
                                                                 
Current Period gross charge-offs
  
$
 —    
$
—
    
$
 —    
$
—
    
$
 —    
$
—
    
$
29
    
$
29
  

December 31, 2022
  
Pass
    
Criticized
    
Classified
    
Total
  
Commercial real estate:
                        
Owner-occupied
  
$
68,236
    
$
3,545
    
$
938
    
$
72,719
  
Nonowner-occupied
    
177,479
      
5,352
      
—
      
182,831
  
Construction
    
33,143
      
—
      
62
      
33,205
  
Commercial and industrial
    
147,627
      
1,879
      
1,726
      
151,232
  
Total
  
$
426,485
    
$
10,776
    
$
2,726
    
$
439,987
  


The Company considers the performance of the loan portfolio and its impact on the ACL.  For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment of residential and consumer loans by class of loans based on repayment activity as of December 31, 2023 and 2022:
 
Term Loans Amortized Cost Basis by Origination Year
        
December 31, 2023
2023
  
2022
  
2021
  
2020
  
2019
  
Prior
  
Revolving
Loans
Amortized
Cost Basis
  
Total
  
                                 
Residential Real Estate:
                                
Payment Performance
                                
Performing
  
$
50,484
    
$
44,640
    
$
50,949
    
$
44,818
    
$
21,854
    
$
91,956
    
$
13,560
    
$
318,261
  
Nonperforming
    
—
      
—
       —      
—
      
182
      
1,061
      
—
      
1,243
  
Total
  
$
50,484
    
$
44,640
    
$
50,949
    
$
44,818
    
$
22,036
    
$
93,017
    
$
13,560
    
$
319,504
  
 
                                                                
Current Period gross charge-offs
   $ —    
$
—
    
$
3
    
$
—
     $ —    
$
118
    
$
—
    
$
121
  

 
Term Loans Amortized Cost Basis by Origination Year
  
     
December 31, 2023
2023
  
2022
  
2021
  
2020
  
2019
  
Prior
  
Revolving
Loans
Amortized
Cost Basis
  
Total
  
                                 
Consumer:              
                               
Automobile
                               
Payment Performance
                                
Performing
  
$
28,939
    
$
20,376
    
$
7,013
    
$
3,028
    
$
1,212
    
$
759
     $ —    
$
61,327
  
Nonperforming
    
34
      
60
      
15
      
1
      
9
      
15
      
—
      
134
  
Total
  
$
28,973
    
$
20,436
    
$
7,028
    
$
3,029
    
$
1,221
    
$
774
    
$
—
    
$
61,461
  
 
                                                                
Current Period gross charge-offs
  
$
51
    
$
163
    
$
116
    
$
6
    
$
29
    
$
3
    
$
—
    
$
368
  
 

Term Loans Amortized Cost Basis by Origination Year
  
     
December 31, 2023
2023
  
2022
  
2021
  
2020
  
2019
  
Prior
  
Revolving
Loans
Amortized
Cost Basis
  
Total
  
                                 
Consumer:                      
                               
Home Equity
                               
Payment Performance
                                
Performing
  
$
1,649
    
$
79
     $ —    
$
—
    
$
—
    
$
—
    
$
34,070
    
$
35,798
  
Nonperforming
    
—
      
—
      
—
      
—
      
—
      
—
      
95
      
95
  
Total
  
$
1,649
    
$
79
    
$
—
    
$
—
    
$
—
     $ —    
$
34,165
    
$
35,893
  
 
                                                                
Current Period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
     $ —    
$
87
    
$
87
  

 
Term Loans Amortized Cost Basis by Origination Year
  
     
December 31, 2023
2023
  
2022
  
2021
  
2020
  
2019
  
Prior
  
Revolving
Loans
Amortized
Cost Basis
  
Total
  
                                 
Consumer:                       
                               
Other
                               
Payment Performance
                                
Performing
  
$
18,377
    
$
24,904
    
$
10,800
    
$
4,482
    
$
1,093
    
$
953
    
$
14,087
    
$
74,696
  
Nonperforming
    
11
      
17
      
67
      
53
      
1
      
4
      
1
      
154
  
Total
  
$
18,388
    
$
24,921
    
$
10,867
    
$
4,535
    
$
1,094
    
$
957
    
$
14,088
    
$
74,850
  
 
                                                                
Current Period gross charge-offs
  
$
306
    
$
119
    
$
119
    
$
84
    
$
28
    
$
53
    
$
246
    
$
955
  

   
Consumer
              
December 31, 2022
  
Automobile
    
Home Equity
    
Other
    
Residential
Real Estate
    
Total
  
Performing
  
$
54,728
    
$
27,640
    
$
64,928
    
$
295,228
    
$
442,524
  
Nonperforming
    
109
      
151
      
470
      
1,808
      
2,538
  
Total
  
$
54,837
    
$
27,791
    
$
65,398
    
$
297,036
    
$
445,062
  
 

The Company originates residential, consumer, and commercial loans to customers located primarily in the southeastern areas of Ohio as well as the western counties of West Virginia.  Approximately 4.37% of total loans were unsecured at December 31, 2023, down from 4.52% at December 31, 2022.

Modifications to Borrowers Experiencing Financial Difficulty:



Occasionally, the Company modifies loans to borrowers experiencing financial difficulty.  These modifications may include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a reduction in the contractual principal and interest payments of the loan; or short-term interest-only payment terms. All modifications to borrowers experiencing financial difficulty are considered to be impaired.



During the year ended December 31, 2023, the Company experienced no new modifications to borrowers experiencing financial difficulty.



The following table presents the activity in the ACL by portfolio segment for the years ended December 31, 2023 and 2022:
December 31, 2023
  
Residential
Real Estate
    
Commercial
Real Estate
    
Commercial
& Industrial
    
Consumer
    
Total
  
Allowance for credit losses:
                              
Beginning balance
  
$
681
    
$
2,038
    
$
1,293
    
$
1,257
    
$
5,269
  
Impact of adopting ASC 326
     1,345       162       (116 )     771       2,162  
Provision for credit losses
    
251
      
824
      
(85
)
    
1,040
      
2,030
  
Loans charged off
    
(121
)
    
(132
)
    
(29
)
    
(1,410
)
    
(1,692
)
Recoveries
    
57
      
155
      
212
      
574
      
998
  
Total ending allowance balance
  
$
2,213
    
$
3,047
    
$
1,275
    
$
2,232
    
$
8,767
  

December 31, 2022
  
Residential
Real Estate
    
Commercial
Real Estate
    
Commercial
& Industrial
    
Consumer
    
Total
  
Allowance for credit losses:
                              
Beginning balance
  
$
980
    
$
2,548
    
$
1,571
    
$
1,384
    
$
6,483
  
Provision for credit losses
    
(318
)
    
(556
)
    
283
   
559
      
(32
)
Loans charged off
    
(135
)
    
(36
)
    
(618
)
    
(1,399
)
    
(2,188
)
Recoveries
    
154
      
82
      
57
      
713
      
1,006
  
Total ending allowance balance
  
$
681
    
$
2,038
    
$
1,293
    
$
1,257
    
$
5,269
  



The following table presents the balance in the ACL and the recorded investment of loans by portfolio segment and based on impairment method as of December 31, 2022:

December 31, 2022
  
Residential
Real Estate
    
Commercial
Real Estate
    
Commercial
& Industrial
    
Consumer
    
Total
  
Allowance for credit losses:
                              
Ending allowance balance attributable to loans:
                              
Individually evaluated for impairment
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
Collectively evaluated for impairment
    
681
      
2,038
      
1,293
      
1,257
      
5,269
  
Total ending allowance balance
  
$
681
    
$
2,038
    
$
1,293
    
$
1,257
    
$
5,269
  
                                         
Loans:
                                        
Loans individually evaluated for impairment
 
$
—
    
$
1,986
    
$
—
    
$
28
    
$
2,014
  
Loans collectively evaluated for impairment
   
297,036
      
286,769
      
151,232
      
147,998
      
883,035
  
Total ending loans balance
  
$
297,036
    
$
288,755
    
$
151,232
    
$
148,026
    
$
885,049
  


The following table presents the amortized cost basis of collateral dependent loans by class of loans as of December 31, 2023:



 
Collateral Type
  
December 31, 2023
  
Real Estate
    
Business Assets
    
Total
  
Residential real estate
  
$
1,663
    
$
—
    
$
1,663
  
Commercial real estate:
                        
Owner-occupied
    
700
      
258
      
958
  
Consumer:
                        
Home equity
    
27
      
—
      
27
  
Total collateral dependent loans
  
$
2,390
    
$
258
    
$
2,648
  


The following table presents information related to loans individually evaluated for impairment by class of loans as of the years ended December 31, 2022:

December 31, 2022
  
Unpaid
Principal
Balance
    
Recorded
Investment
    
Allowance
for
Loan Losses
Allocated
    
Average
Impaired
Loans
    
Interest
Income
Recognized
    
Cash Basis
Interest
Recognized
  
With an allowance recorded:   $ —     $ —     $ —     $ —     $ —     $ —  
                                                 
With no related allowance recorded:
                                                
Commercial real estate:
                                                
Owner-occupied
    
1,692
      
1,607
      
—
      
1,662
      
97
      
97
  
Nonowner-occupied
    
379
      
379
      
—
      
382
      
29
      
29
  
Consumer:
                                                
Home equity
   
28
      
28
      
—
      
23
      
2
      
2
  
                                                 
Total
  
$
2,099
    
$
2,014
    
$
—
   
$
2,067
    
$
128
    
$
128
  


The recorded investment of a loan excludes accrued interest and net deferred origination fees and costs due to immateriality.
   

Nonaccrual loans and loans past due 90 days or more and still accruing include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified as impaired loans.
   

The Company transfers loans to other real estate owned, at fair value less cost to sell, in the period the Company obtains physical possession of the property (through legal title or through a deed in lieu). As of December 31, 2023, the Company had $68 in other real estate owned for residential real estate properties compared to none at December 31, 2022. In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $348 and $370 as of December 31, 2023 and 2022, respectively.