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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended March 31, 2024

 

OR

 

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

 

For the transition period from _____________to________________

 

Commission file No. 000-19028

 

MUNCY COLUMBIA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

pennsylvania   23-2254643
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)    Identification No.)

 

 

232 East Street, Bloomsburg, Pennsylvania   17815
(Address of principal executive offices)    (Zip Code)

 

Registrant’s telephone number, including area code: (570) 784-4400

 

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

 

Title of Each Class   Trading Symbol   Name of Each Exchange on Which Registered
None   None   None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to 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 “larger 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 the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date:

Common stock, $1.25 par value, 3,572,288 shares outstanding as of May 13, 2024.

 

 

 

 

 

Muncy Columbia Financial Corporation

Index to Quarterly Report on Form 10-Q

 

  Page
Number
Part I. Financial Information  
   
Item 1. Financial Statements (unaudited) 3
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Comprehensive Income 5
Consolidated Statements of Changes in Stockholders’ Equity 6
Consolidated Statements of Cash Flows 7
Notes to Unaudited Consolidated Financial Statements 8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23
Item 3. Quantitative and Qualitative Disclosure About Market Risk 38
Item 4. Controls and Procedures 38
   
Part II. Other Information  
   
Item 1. Legal Proceedings 38
Item 1A. Risk Factors 39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39
Item 3. Defaults Upon Senior Securities 39
Item 4. Mine Safety Disclosures 39
Item 5. Other Information 39
Item 6. Exhibits 39
     
Signatures 40

 

2 

 

PART I Financial Information

Item 1. Financial Statements

 

Muncy Columbia Financial Corporation

Consolidated Balance Sheets

 

(In Thousands, Except Share and Per Share Data) (Unaudited)  March 31,
2024		   December 31,
2023		 
ASSETS          
Cash and due from banks  $11,994   $14,614 
Interest-bearing deposits in other banks   4,237    3,763 
Total cash and cash equivalents   16,231    18,377 
           
Interest-bearing time deposits   736    979 
Available-for-sale debt securities, at fair value   339,594    413,302 
Marketable equity securities, at fair value   1,178    1,295 
Restricted investment in bank stocks, at cost   8,013    10,394 
Loans held for sale   614    366 
           
Loans receivable   1,080,747    1,068,429 
Allowance for credit losses   (9,351)   (9,302)
 Loans, net   1,071,396    1,059,127 
           
Premises and equipment, net   27,322    27,569 
Foreclosed assets held for sale   335    170 
Accrued interest receivable   4,849    5,362 
Bank-owned life insurance   40,456    40,209 
Investment in limited partnerships   5,641    5,828 
Deferred tax asset, net   11,745    12,634 
Goodwill   25,609    25,609 
Core deposit intangible, net   11,346    11,895 
Other assets   8,206    6,663 
TOTAL ASSETS  $1,573,271   $1,639,779 
           
LIABILITIES          
Interest-bearing deposits  $949,546   $884,654 
Noninterest-bearing deposits   263,954    266,015 
Total deposits   1,213,500    1,150,669 
           
Short-term borrowings   125,913    252,532 
Long-term borrowings   65,524    70,448 
Accrued interest payable   2,281    2,358 
Other liabilities   11,190    9,947 
TOTAL LIABILITIES   1,418,408    1,485,954 
           
STOCKHOLDERS’ EQUITY          
Common stock, par value $1.25 per share; 15,000,000 shares authorized; issued 3,836,988 and outstanding 3,572,288 at March 31, 2024; issued 3,834,976 and outstanding 3,570,276 at December 31, 2023;   4,796    4,794 
Additional paid-in capital   83,403    83,343 
Retained earnings   92,980    90,514 
Accumulated other comprehensive loss   (16,526)   (15,036)
Treasury stock, at cost; 264,700 shares at March 31, 2024 and December 31, 2023   (9,790)   (9,790)
TOTAL STOCKHOLDERS’ EQUITY   154,863    153,825 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $1,573,271   $1,639,779 

 

See accompanying notes to the unaudited consolidated financial statements.

 

3 

 

Muncy Columbia Financial Corporation

Consolidated Statements of Income

 

               
   For the Three Months Ended 
   March 31, 
(In Thousands, Except Share and Per Share Data) (Unaudited)  2024   2023 
INTEREST AND DIVIDEND INCOME          
Interest and fees on loans:          
Taxable  $17,256   $5,934 
Tax-exempt   353    216 
Interest and dividends on investment securities:          
Taxable   1,161    1,208 
Tax-exempt   830    129 
Dividend and other interest income   223    67 
Deposits in other banks   66    60 
TOTAL INTEREST AND DIVIDEND INCOME   19,889    7,614 
           
INTEREST EXPENSE          
Deposits   4,610    627 
Short-term borrowings   2,497    1,786 
Long-term borrowings   847    — 
TOTAL INTEREST EXPENSE   7,954    2,413 
           
NET INTEREST INCOME   11,935    5,201 
           
Provision (credit) for credit losses - loans   101    (418)
(Credit) provision for credit losses - off balance sheet credit exposures   (11)   9 
TOTAL PROVISION (CREDIT) FOR CREDIT LOSSES   90    (409)
           
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR CREDIT LOSSES   11,845    5,610 
           
NON-INTEREST INCOME          
Service charges and fees   615    525 
Gain on sale of loans   76    29 
Earnings on bank-owned life insurance   227    109 
Brokerage fees   224    128 
Trust fees   206    191 
Losses on marketable equity securities   (117)   (81)
Realized losses on available-for-sale debt securities, net   (8)   — 
Interchange fees   619    424 
Other non-interest income   690    301 
TOTAL NON-INTEREST INCOME   2,532    1,626 
           
NON-INTEREST EXPENSE          
Salaries and employee benefits   4,802    2,592 
Occupancy   618    323 
Furniture and equipment   896    519 
Pennsylvania shares tax   210    161 
Professional fees   799    311 
Director’s fees   134    82 
Federal deposit insurance   220    108 
Telecommunications   88    84 
Automated teller machine and interchange   262    119 
Merger-related expenses   96    — 
Amortization of core deposit intangible   549    — 
Other non-interest expense   972    518 
TOTAL NON-INTEREST EXPENSE   9,646    4,817 
           
INCOME BEFORE INCOME TAX PROVISION   4,731    2,419 
INCOME TAX PROVISION   695    479 
NET INCOME  $4,036   $1,940 
           
EARNINGS PER SHARE - BASIC AND DILUTED  $1.13   $0.93 
WEIGHTED AVERAGE SHARES OUTSTANDING   3,570,342    2,079,135 

 

See accompanying notes to the unaudited consolidated financial statements.

 

4 

 

Muncy Columbia Financial Corporation

Consolidated Statements of Comprehensive Income

 

               
   For the Three Months Ended 
   March 31, 
(In Thousands) (Unaudited)  2024   2023 
Net Income  $4,036   $1,940 
Other comprehensive (loss) income:          
Unrealized holding (losses) gains on available-for-sale debt securities   (1,893)   6,354 
Tax effect   397    (1,335)
Net realized loss included in net income   8    — 
Tax effect   (2)   — 
Other comprehensive (loss) income, net   (1,490)   5,019 
Comprehensive income  $2,546   $6,959 

 

See accompanying notes to the unaudited consolidated financial statements.

 

5 

 

Muncy Columbia Financial Corporation

Consolidated Statements of Changes in Stockholders’ Equity

 

                            Accumulated              
    Common     Additional           Other           Total  
(In Thousands Except Share and Per Share Data) (Unaudited)   Stock     Paid-In     Retained     Comprehensive     Treasury     Stockholders’  
  Shares     Amount     Capital     Earnings     Loss     Stock     Equity  
Balance, December 31, 2022     2,343,835     $ 2,930     $ 30,030     $ 90,156     $ (27,384 )   $ (9,790 )   $ 85,942  
                                                         
Net income     —       —       —       1,940       —       —       1,940  
Other comprehensive income     —       —       —       —       5,019       —       5,019  
Common stock issuance under employee stock purchase plan     514       —       20       —       —       —       20  
Recognition of employee stock purchase plan expense     —       —       2       —       —       —       2  
Cash dividends ($0.42 per share)     —       —       —       (874 )     —       —       (874 )
Cumulative effect of adoption of ASU 2016-13     —       —       —       528       —       —       528  
                                                         
Balance, March 31, 2023     2,344,349     $ 2,930     $ 30,052     $ 91,750     $ (22,365 )   $ (9,790 )   $ 92,577  
                                                         
Balance, December 31, 2023     3,834,976     $ 4,794     $ 83,343     $ 90,514     $ (15,036 )   $ (9,790 )   $ 153,825  
                                                         
Net income     —       —       —       4,036       —       —       4,036  
Other comprehensive loss     —       —       —       —       (1,490 )     —       (1,490 )
Common stock issuance under employee stock purchase plan     2,012       2       54       —       —       —       56  
Recognition of employee stock purchase plan expense     —       —       6       —       —       —       6  
Cash dividends ($0.44 per share)     —       —       —       (1,570 )     —       —       (1,570 )
                                                         
Balance, March 31, 2024     3,836,988     $ 4,796     $ 83,403     $ 92,980     $ (16,526 )   $ (9,790 )   $ 154,863  

 

See accompanying notes to the unaudited consolidated financial statements.

 

6 

 

Muncy Columbia Financial Corporation

Consolidated Statements of Cash Flows

 

               
   For the Three Months Ended 
   March 31, 
(In Thousands) (Unaudited)  2024   2023 
OPERATING ACTIVITIES          
Net Income  $4,036   $1,940 
Adjustments to reconcile net income to net cash provided by operating activities:          
Provision (credit) for credit losses   90    (409)
Depreciation and amortization of premises and equipment   370    165 
Accretion of loans, net   (2,789)   — 
Amortization of deposits, net   481    — 
Losses on marketable equity securities   117    81 
Realized losses on available-for-sale debt securities, net   8    — 
(Accretion) amortization of investment securities, net   (184)   141 
Deferred income taxes   1,284    107 
Gain on sale of loans   (76)   (29)
Proceeds from sale of mortgage loans   2,257    2,929 
Originations of mortgage loans held for resale   (2,429)   (1,157)
Amortization of core deposit intangibles   549    — 
Amortization of investment in limited partnerships   187    53 
Decrease (increase) in accrued interest receivable   513    (152)
Earnings on bank-owned life insurance   (227)   (109)
(Decrease) increase in accrued interest payable   (77)   115 
Other, net   (232)   197 
Net cash provided by operating activities   3,878    3,872 
INVESTING ACTIVITIES          
Available-for-sale debt securities:          
Purchases   —    (789)
Proceeds from sales   50,311    — 
Proceeds from paydowns, calls and maturities   21,688    3,904 
Proceeds from maturities of interest-bearing time deposits   248    — 
Purchase of bank-owned life insurance   (20)   (20)
Proceeds from redemption of restricted investment in bank stocks   4,232    758 
Purchase of restricted investment in bank stocks   (1,851)   (1,002)
Net increase in loans   (9,735)   (11,491)
Purchase of investment in limited partnership   —    (1,394)
Acquisition of premises and equipment   (113)   (79)
Net cash provided by (used for) investing activities   64,760    (10,113)
FINANCING ACTIVITIES          
Net increase (decrease) in deposits   62,350    (6,949)
Net (decrease) increase in short-term borrowings   (126,619)   11,155 
Repayment of long-term borrowings   (5,001)   (1)
Proceeds from issuance of common stock   56    20 
Cash dividends paid   (1,570)   (874)
Net cash (used for) provided by financing activities   (70,784)   3,351 
NET DECREASE IN CASH AND CASH EQUIVALENTS   (2,146)   (2,890)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   18,377    13,084 
CASH AND CASH EQUIVALENTS, END OF PERIOD  $16,231   $10,194 
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION          
           
Interest paid  $8,031   $2,298 
Loans transferred to foreclosed assets held for sale   165    — 

 

See accompanying notes to the unaudited consolidated financial statements.

 

7 

 

 

MUNCY COLUMBIA FINANCIAL CORPORATION 

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the accounts of Muncy Columbia Financial Corporation (the “Corporation”) and its wholly-owned subsidiary, Journey Bank (the “Bank”). All significant inter-company balances and transactions have been eliminated in consolidation.

 

BASIS OF PRESENTATION

 

The consolidated financial information included herein, except the consolidated balance sheet dated December 31, 2023, is unaudited. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included. Prior period amounts have been reclassified when necessary to conform to the current period’s presentation. Such reclassifications did not have an impact on the operating results or financial position of the Corporation. Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results for the year ending December 31, 2024.

 

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation’s audited financial statements, included in the Annual Report filed on Form 10-K as of and for the year ended December 31, 2023.

 

RECENTLY ISSUED BY NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS

 

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. ASU No. 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024. The ASU may be adopted on a prospective or retrospective basis and early adoption is permitted. The Corporation is currently evaluating the impact the new guidance will have on related disclosures related to income taxes.

 

2. BUSINESS COMBINATION

 

On November 11, 2023, the Corporation completed its merger with Muncy Bank Financial, Inc. (“MBF”). MBF was a Pennsylvania corporation that conducted its business primarily through its wholly owned subsidiary The Muncy Bank & Trust Company, which operated from a main office in Muncy, Pennsylvania, and had nine additional branches throughout Northcentral Pennsylvania. The MBF merger has contributed significantly to growth in the size of the Corporation’s balance sheet and in net interest income and non-interest expenses.

 

In connection with the transaction, the Corporation recorded goodwill of $17.7 million and a core deposit intangible asset of $12.1 million. Assets acquired included gross loans valued at $504.1 million, available-for-sale debt securities valued at $93.0 million, bank-owned life insurance valued at $17.8 million and premises and equipment, net, valued at $14.9 million. Liabilities assumed included deposits valued at $521.3 million and borrowings valued at $105.5 million. The assets acquired and liabilities assumed in the merger were recorded at their estimated fair values at the time of closing, subject to refinement for up to one year after the closing date. There were no adjustments to the fair value measurements of assets acquired or liabilities assumed in the first quarter 2024.

 

 8

 

 

3. SECURITIES

 

The amortized cost, related estimated fair value, and unrealized gains and losses of available-for-sale debt securities were as follows at March 31, 2024 and December 31, 2023:

 

   March 31, 2024 
       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
(In Thousands)  Cost   Gains   Losses   Value 
Obligation of U.S. Government Corporations and Agencies:                    
Mortgage-backed  $126,286   $115   $(15,807)  $110,594 
Collateralized mortgage obligations   7,698    351    —    8,049 
Other   145,000    —    (8,571)   136,429 
Obligations of state and political subdivisions   81,261    3,145    (159)   84,247 
Other debt securites   268    7    —    275 
Total available-for-sale debt securities  $360,513   $3,618   $(24,537)  $339,594 

 

   December 31, 2023 
       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
(In Thousands)  Cost   Gains   Losses   Value 
Obligation of U.S.Government Corporations and Agencies:                    
Mortgage-backed  $145,196   $1,158   $(15,014)  $131,340 
Collateralized mortgage obligations   8,515    503    —    9,018 
Other   197,325    —    (9,613)   187,712 
Obligations of state and political subdivisions   81,033    4,032    (109)   84,956 
Other debt securites   267    9    —    276 
Total available-for-sale debt securities  $432,336   $5,702   $(24,736)  $413,302 

 

Securities available-for-sale with an aggregate fair value of $176,203,000 and $263,706,000 at March 31, 2024 and December 31, 2023, respectively, were pledged to secure public funds, trust funds, securities sold under agreements to repurchase and other balances as required by law.

 

The amortized cost and estimated fair value of investment securities, by expected maturity, are shown below at March 31, 2024. Expected maturities on debt securities will differ from contractual maturities, because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

   Amortized     
(In Thousands)  Cost   Fair Value 
Due in one year or less  $34,888   $33,710 
Due after one year to five years   117,204    109,777 
Due after five years to ten years   21,596    21,944 
Due after ten years   52,841    55,520 
Sub-total   226,529    220,951 
           
Mortgage-backed securities   126,286    110,594 
Collateralized mortgage obligations   7,698    8,049 
Total debt securities  $360,513   $339,594 

 

The Corporation’s mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of interest rates. In the table above, mortgage-backed securities and collateralized mortgage obligations are shown in one period.

 

 9

 

  

Proceeds from the sale of investments in debt securities classified as available-for-sale for the three months ended March 31, 2024, were $50,311,000. Gross realized gains and losses for the three months ended March 31, 2024, were $595,000 and $603,000, respectively. There were no sales of investments in debt securities classified as available-for-sale during the quarter ended March 31, 2023.

 

The following summary shows the gross unrealized losses and fair value, aggregated by investment category of those individual securities for which an allowance for credit losses has not been recorded that have been in a continuous unrealized loss position for less than or more than 12 months as of March 31, 2024 and December 31, 2023:

 

   March 31, 2024 
   Less than Twelve Months   Twelve Months or Greater   Total 
       Gross       Gross       Gross 
   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
(In Thousands)  Value   Losses   Value   Losses   Value   Losses 
Obligations of U.S. Government Corporations and Agencies:                         
      Mortgage-backed  $212   $(4)  $108,228   $(15,803)  $108,440   $(15,807)
     Other   —    —    136,429    (8,571)   136,429    (8,571)
Obligations of state and political subdivisions   14,209    (142)   1,340    (17)   15,549    (159)
     Total  $14,421   $(146)  $245,997   $(24,391)  $260,418   $(24,537)

 

   December 31, 2023 
   Less than Twelve Months   Twelve Months or Greater   Total 
       Gross       Gross       Gross 
   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
(In Thousands)  Value   Losses   Value   Losses   Value   Losses 
Obligations of U.S. Government Corporations and Agencies:                         
      Mortgage-backed  $47   $(1)  $112,884   $(15,013)  $112,931   $(15,014)
     Other   —    —    187,712    (9,613)   187,712    (9,613)
Obligations of state and political subdivisions   10,284    (90)   1,663    (19)   11,947    (109)
     Total  $10,331   $(91)  $302,259   $(24,645)  $312,590   $(24,736)

 

At March 31, 2024, the Corporation had a total of 48 debt securities that have been in a gross unrealized loss position for less than twelve months with depreciation of 1.0% from the Corporation’s amortized cost basis.

 

At March 31, 2024, the Corporation had a total of 122 debt securities that have been in a gross unrealized loss position for greater than twelve months with depreciation of 9.0% from the Corporation’s amortized cost basis.

 

At March 31, 2024, unrealized losses on debt securities have not been recognized into income because the issuers bonds are of high credit quality (rated BBB or higher), management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The fair value is expected to recover as the bonds approach maturity.

 

As of March 31, 2024 and December 31, 2023, no allowance for credit loss (“ACL”) was required for debt securities. The Bank does not have the intent to sell and does not believe it will be more likely than not to be required to sell any of these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.

 

As of March 31, 2024, all debt securities were rated above investment grade. Based on the payment status, rating and management’s evaluation of these securities, no ACL was required for the debt securities as of March 31, 2024. As of March 31, 2024, the underlying issuers continue to make timely principal and interest payments on the securities.

 

 10

 

 

Equity securities with a readily determinable fair value are stated at fair value with realized and unrealized gains and losses reported in income. At March 31, 2024 and December 31, 2023, the Corporation had $1,178,000 and $1,295,000, respectively, in marketable equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on marketable equity securities during the three months ended March 31, 2024 and 2023:

 

   For the Three Months Ended  
   March 31, 
(In Thousands)  2024   2023 
Net losses recognized during the period on marketable equity securities  $(117)  $(81)
           
Less: Net gains and losses recognized during the period on marketable equity securities dold during the period   —    — 
           
Unrealized losses recognized during the period on marketable equity securities still held at the reporting date  $(117)  $(81)

 

4. LOANS AND ALLOWANCE FOR CREDIT LOSSES

 

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment to yield (interest income) over the life of the loan. Deferred fees and costs amounted to $809,000 at March 31, 2024 and $779,000 at December 31, 2023 and are netted against the outstanding unpaid principal balances.

 

The segments of the Corporation’s loan portfolio are disaggregated into classes that allow management to monitor risk and performance. The loan classes used are consistent with the internal reports evaluated by the Corporation’s management and Board of Directors to monitor risk and performance within the various segments of its loan portfolio.

Major classifications of loans at March 31, 2024 and December 31, 2023 consisted of:

 

(In Thousands)  March 31, 2024 
Commercial and industrial  $98,902 
Commercial real estate:     
   Commercial mortgages   327,987 
   Student housing   35,466 
Residential real estate:     
   Rental 1-4 family   56,125 
   1-4 family residential mortgages   537,855 
Consumer and other   24,412 
Gross loans  $1,080,747 

 

(In Thousands)  December 31, 2023 
Commercial and industrial  $94,278 
Commercial real estate:     
   Commercial mortgages   326,152 
   Student housing   33,650 
Residential real estate:     
   Rental 1-4 family   54,078 
   1-4 family residential mortgages   535,206 
Consumer and other   25,065 
Gross loans  $1,068,429 

 

Allowance for Credit Losses and Recorded Investment in Financial Receivables

 

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Corporation has aligned our segmentation to internal loan reports. The Corporation has identified the following portfolio segments: 

 

●Commercial and Industrial
●Commercial Real Estate
●Residential Real Estate
●Consumer and other

 

 11

 

 

The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2024 and 2023:

 

                         
   For the Three Months Ended March 31, 2024 
       Commercial   Residential             
   Commercial and   Real   Real   Consumer         
(In Thousands)  Industrial   Estate   Estate   and Other   Unallocated   Total 
Balance, December 31, 2023  $801   $6,847   $1,474   $180   $—   $9,302 
(Credit) provision charged to operations   (90)   319    (368)   240    —    101 
Loans charged off   —    —    (45)   (11)   —    (56)
Recoveries   1    —    1    2    —    4 
Balance, March 31, 2024  $712   $7,166   $1,062   $411   $—   $9,351 

 

                         
   For the Three Months Ended March 31, 2023 
       Commercial   Residential             
   Commercial and   Real   Real   Consumer         
(In Thousands)  Industrial   Estate   Estate   and Other   Unallocated   Total 
Balance, December 31, 2022  $1,041   $2,897   $3,077   $60   $204   $7,279 
Impact of adopting ASC 326   (961)   3,205    (2,620)   (41)   (204)   (621)
(Credit) provision charged to operations   (117)   (391)   97    (7)   —    (418)
Loans charged off   —    —    (6)   —    —    (6)
Recoveries   49    1    4    —    —    54 
Balance, March 31, 2023  $12   $5,712   $552   $12   $—   $6,288 

 

The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Corporation’s historical loss experience. As of March 31, 2024, the Corporation expects that the market in which it operates will experience no significant change in economic conditions based primarily on housing indexes, interest rate stabilization, and a steady unemployment rate causing the trend in delinquencies over the next year to follow historical levels. Management adjusted the historical loss experience for these expectations. No reversion adjustments were necessary, as the starting point for the Corporation’s estimate was a cumulative loss rate covering the expected contractual term of the loan portfolio.

 

The Corporation recorded a $101,000 provision for credit losses for the three months ended March 31, 2024 as compared to a $418,000 credit for the quarter ended March 31, 2023. The 2024 provision for credit losses was primarily as a result of an increase in volume in the Corporation’s loan portfolio. The 2023 credit was a result of reduced commercial real estate past dues, reduced balances of commercial student housing real estate, and slightly improved economic forecasts.

 

Total non-performing assets amounted to $7,328,000 at March 31, 2024, as compared to $4,475,000 at December 31, 2023. For the three months ended March 31, 2024, the increase in non-performing assets was primarily attributable to one real estate loan relationship with an aggregate balance of $2,221,000 which was placed on nonaccrual status during the quarter. This relationship is well secured, and the Bank is working closely with the borrower to bring the relationship to a current status. The Bank does not expect to incur a credit loss related to this relationship at this time. Overall, non-performing loans remain well controlled at 0.65% of total gross loans at March 31, 2024 compared to 0.40% of total gross loans at December 31, 2023. The Corporation experienced net charge-offs of $52,000 for the three months ended March 31, 2024, as compared to net recoveries of $48,000 for the three months ended March 31, 2023. In summary, the allowance for credit losses on our loan portfolio provided 133.8% coverage of non-performing loans, and 0.87% of total loans, on March 31, 2024, compared to 216.0% coverage of non-performing loans, and 0.87% of total loans, on December 31, 2023.

 

Historical credit loss experience is the basis for the estimation of expected credit losses. The Corporation applies historical loss rates to pools of loans with similar risk characteristics. After consideration of the historic loss calculation, management can apply qualitative adjustments to reflect the current conditions and reasonable and supportive forecasts not already captured in the historical loss information at the balance sheet date.

 

In accordance with Accounting Standards Codification (“ASC”) 326, the Corporation will evaluate individual loans for expected credit losses when those loans do not share similar risk characteristics with loans evaluated using a collective (pooled) basis. In contrast to legacy accounting standards, this criterion is broader than the impairment concept and management may evaluate loans individually when no specific expectation of collectability is in place. Loans will not be included in both collective and individual analysis. The individual analysis will establish a specific reserve for loans in scope.

 

Specific reserves are established based on the following three acceptable methods for measuring the ACL:1) the present value of expected future cash flows discounted at the loan’s original interest rate; 2) the loan’s observable market price; 3) the fair value of the collateral when the loan is collateral dependent. The method is selected on a loan-by-loan basis with the evaluation of the need and amount of a specific allocation of the allowance being made on a quarterly basis.

 

 12

 

 

The need for an updated appraisal on collateral dependent loans is determined on a case-by-case basis. The useful life of an appraisal or evaluation will vary depending upon the circumstances of the property and the economic conditions in the marketplace. A new appraisal is not required if there is an existing appraisal which, along with other information, is sufficient to determine a reasonable value for the property and to support an appropriate and adequate allowance for credit losses. At a minimum, annual documented reevaluation of the property is completed by the Bank’s Chief Credit Officer to support the value of the property.

 

When receiving an appraisal associated with an existing real estate collateral dependent transaction, the Bank’s Chief Credit Officer must determine if there have been material changes to the underlying assumptions in the appraisal which affect the original estimate of value. Some of the factors that could cause material changes to reported values include:

●the passage of time;
●the volatility of the local market;
●the availability of financing;
●natural disasters;
●the inventory of competing properties;
●new improvements to, or lack of maintenance of, the subject property or competing properties upon physical inspection by the Bank;
●changes in underlying economic and market assumptions, such as material changes in current and projected vacancy, absorption rates, capitalization rates, lease terms, rental rates, sales prices, concessions, construction overruns and delays, zoning changes, etc.; and/or
●environmental contamination.

 

The value of the property is adjusted to appropriately reflect the above listed factors and the value is discounted to reflect the value impact of a forced distressed sale, any outstanding senior liens, any outstanding unpaid real estate taxes, transfer taxes and closing costs that would occur with sale of the real estate. If the Chief Credit Officer determines that a reasonable value cannot be derived based on the available information, a new appraisal is ordered. The determination of the need for a new appraisal rests with the Chief Credit Officer and not the originating account officer.

 

The following table summarizes the loan portfolio and allowance for credit losses as of March 31, 2024 and December 31, 2023:

 

                     
   March 31, 2024 
       Commercial   Residential         
   Commercial and   Real   Real   Consumer     
(In Thousands)  Industrial   Estate   Estate   and Other   Total 
Loans:                         
Individually evaluated  $—   $12,169   $—   $—   $12,169 
Collectively evaluated   98,902    351,284    593,980    24,412    1,068,578 
Total loans  $98,902   $363,453   $593,980   $24,412   $1,080,747 
                          
Allowance for credit losses:                         
Individually evaluated  $—   $4,053   $—   $—   $4,053 
Collectively evaluated   712    3,113    1,062    411    5,298 
Total allowance for credit losses  $712   $7,166   $1,062   $411   $9,351 

 

                     
   December 31, 2023 
       Commercial   Residential         
   Commercial and   Real   Real   Consumer     
(In Thousands)  Industrial   Estate   Estate   and Other   Total 
Loans:                         
Individually evaluated  $—   $12,279   $—   $—   $12,279 
Collectively evaluated   94,278    347,523    589,284    25,065    1,056,150 
Total loans  $94,278   $359,802   $589,284   $25,065   $1,068,429 
                          
Allowance for credit losses:                         
Individually evaluated  $—   $4,143   $—   $—   $4,143 
Collectively evaluated   801    2,704    1,474    180    5,159 
Total allowance for credit losses  $801   $6,847   $1,474   $180   $9,302 

 

As of March 31, 2024 and December 31, 2023, there were no individually evaluated loans that were deemed to be collateral dependent.

 

 13

 

 

Age Analysis of Past-Due Loans Receivable

 

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past-due status as of March 31, 2024 and December 31, 2023:

 

                         
   March 31, 2024 
       30-59   60-89             
       Days   Days   90+ Days   Total   Total 
(In Thousands)  Current   Past Due   Past Due   Past Due   Past Due   Loans 
Commercial and Industrial  $98,300   $449   $100   $53   $602   $98,902 
Commercial Real Estate   361,614    1,099    358    382    1,839    363,453 
Residential Real Estate   584,928    5,314    975    2,763    9,052    593,980 
Consumer and other   24,325    76    10    1    87    24,412 
   $1,069,167   $6,938   $1,443   $3,199   $11,580   $1,080,747 

 

   December 31, 2023 
       30-59   60-89             
       Days   Days   90+ Days   Total   Total 
(In Thousands)  Current   Past Due   Past Due   Past Due   Past Due   Loans 
Commercial and Industrial  $93,879   $129   $233   $37   $399   $94,278 
Commercial Real Estate   355,786    2,316    960    740    4,016    359,802 
Residential Real Estate   578,802    7,226    1,134    2,122    10,482    589,284 
Consumer and other   24,955    86    18    6    110    25,065 
   $1,053,422   $9,757   $2,345   $2,905   $15,007   $1,068,429 

 

Nonperforming Loans

 

The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of March 31, 2024 and December 31, 2023:

 

                     
   March 31, 2024 
   Nonaccrual   Nonaccrual       Loans Past     
   with no   with   Total   Due over 90 Days   Total 
(In Thousands)  ACL   ACL   Nonaccrual   Still Accruing   Nonperforming 
     Commercial and Industrial  $—   $209   $209   $—   $209 
     Commercial Real Estate   —    982    982    —    982 
     Residential Real Estate   —    5,661    5,661    115    5,776 
     Consumer and other   23    1    24    —    24 
         Total  $23   $6,853   $6,876   $115   $6,991 

 

   December 31, 2023 
   Nonaccrual   Nonaccrual       Loans Past     
   with no   with   Total   Due over 90 Days   Total 
(In Thousands)  ACL   ACL   Nonaccrual   Still Accruing   Nonperforming 
     Commercial and Industrial  $37   $16   $53   $—   $53 
     Commercial Real Estate   100    693    793    —    793 
     Residential Real Estate   —    3,151    3,151    294    3,445 
     Consumer and other   6    9    15    —    15 
         Total  $143   $3,869   $4,012   $294   $4,306 

 

 14

 

 

Credit Quality Indicators

 

The Bank 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 Bank analyzes loans individually to classify the loans as to credit risk. This analysis includes non-homogeneous loans, such as commercial real estate, commercial construction, and commercial and industrial loans. This analysis is performed on a quarterly basis. The Bank uses the following definitions for risk ratings:

 

Pass. Loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

 

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

 

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have 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 existing facts, conditions, and values, highly questionable and improbable.

 

Based on the most recent analysis performed, the following table presents the recorded investment in non-homogenous loans by internal risk rating system as of March 31, 2024 and December 31, 2023:

 

                         
   March 31, 2024 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2024   2023   2022   2021   2020   Prior   Cost Basis   Total 
Commercial and Industrial                                        
Risk Rating                                        
Pass  $8,734   $11,909   $15,738   $15,331   $9,177   $19,180   $13,914   $93,983 
Special Mention   —    98    80    12    404    124    312    1,030 
Substandard   44    178    261    167    6    301    2,932    3,889 
Doubtful   —    —    —    —    —    —    —    — 
Total  $8,778   $12,185   $16,079   $15,510   $9,587   $19,605   $17,158   $98,902 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 
                                         
Commercial Real Estate                                        
Risk Rating                                        
Pass  $5,927   $62,623   $65,330   $66,332   $21,941   $119,494   $13,425   $355,072 
Special Mention   —    —    234    —    —    398    —    632 
Substandard   —    383    1,625    2,459    273    2,266    743    7,749 
Doubtful   —    —    —    —    —    —    —    — 
Total  $5,927   $63,006   $67,189   $68,791   $22,214   $122,158   $14,168   $363,453 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 
                                         
Total                                        
Risk Rating                                        
Pass  $14,661   $74,532   $81,068   $81,663   $31,118   $138,674   $27,339   $449,055 
Special Mention   —    98    314    12    404    522    312    1,662 
Substandard   44    561    1,886    2,626    279    2,567    3,675    11,638 
Doubtful   —    —    —    —    —    —    —    — 
Total  $14,705   $75,191   $83,268   $84,301   $31,801   $141,763   $31,326   $462,355 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 

 

 15

 

 

                         
   December 31, 2023 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2023   2022   2021   2020   2019   Prior   Cost Basis   Total 
Commercial and Industrial                                        
Risk Rating                                        
Pass  $12,342   $16,357   $15,969   $9,681   $2,149   $18,068   $14,463   $89,029 
Special Mention   98    82    12    423    125    —    363    1,103 
Substandard   193    225    168    15    60    624    2,861    4,146 
Doubtful   —    —    —    —    —    —    —    — 
Total  $12,633   $16,664   $16,149   $10,119   $2,334   $18,692   $17,687   $94,278 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 
                                         
Commercial Real Estate                                        
Risk Rating                                        
Pass  $61,858   $65,974   $66,974   $23,184   $20,199   $100,528   $11,116   $349,833 
Special Mention   —    236    —    —    —    404    —    640 
Substandard   364    1,648    2,473    277    620    3,471    476    9,329 
Doubtful   —    —    —    —    —    —    —    — 
Total  $62,222   $67,858   $69,447   $23,461   $20,819   $104,403   $11,592   $359,802 
Current period gross charge-offs  $—   $—   $—   $—   $—   $70   $—   $70 
                                         
Total                                        
Risk Rating                                        
Pass  $74,200   $82,331   $82,943   $32,865   $22,348   $118,596   $25,579   $438,862 
Special Mention   98    318    12    423    125    404    363    1,743 
Substandard   557    1,873    2,641    292    680    4,095    3,337    13,475 
Doubtful   —    —    —    —    —    —    —    — 
Total  $74,855   $84,522   $85,596   $33,580   $23,153   $123,095   $29,279   $454,080 
Current period gross charge-offs  $—   $—   $—   $—   $—   $70   $—   $70 

 

 16

 

 

The Bank monitors the credit risk profile by payment activity for residential real estate, consumer, and other loan classes. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. Nonperforming loans are reviewed quarterly. The following table presents the amortized cost in residential real estate, and consumer and other loans based on payment activity as of March 31, 2024 and December 31, 2023:

 

                         
   March 31, 2024 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2024   2023   2022   2021   2020   Prior   Cost Basis   Total 
Residential Real Estate                                        
Payment Performance                                        
Performing  $13,930   $86,934   $112,082   $84,053   $59,082   $171,039   $61,084   $588,204 
Nonperforming   —    269    978    1,631    454    1,567    877    5,776 
Total  $13,930   $87,203   $113,060   $85,684   $59,536   $172,606   $61,961   $593,980 
Current period gross charge-offs  $—   $—   $—   $—   $—   $45   $—   $45 
                                         
Consumer and Other                                        
Payment Performance                                        
Performing  $1,307   $5,081   $9,512   $1,950   $816   $1,417   $4,305   $24,388 
Nonperforming   —    —    8    2    —    —    14    24 
Total  $1,307   $5,081   $9,520   $1,952   $816   $1,417   $4,319   $24,412 
Current period gross charge-offs  $—   $7   $—   $—   $—   $4   $—   $11 
                                         
Total                                        
Payment Performance                                        
Performing  $15,237   $92,015   $121,594   $86,003   $59,898   $172,456   $65,389   $612,592 
Nonperforming   —    269    986    1,633    454    1,567    891    5,800 
Total  $15,237   $92,284   $122,580   $87,636   $60,352   $174,023   $66,280   $618,392 
Current period gross charge-offs  $—   $7   $—   $—   $—   $49   $—   $56 

 

 

   December 31, 2023 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2023   2022   2021   2020   2019   Prior   Cost Basis   Total 
Residential Real Estate                                        
Payment Performance                                        
Performing  $85,542   $111,413   $84,007   $57,696   $28,192   $141,952   $77,037   $585,839 
Nonperforming   275    92    536    455    443    1,644    —    3,445 
Total  $85,817   $111,505   $84,543   $58,151   $28,635   $143,596   $77,037   $589,284 
Current period gross charge-offs  $—   $—   $—   $—   $—   $79   $—   $79 
                                         
Consumer and Other                                        
Payment Performance                                        
Performing  $5,618   $10,145   $2,330   $990   $394   $1,193   $4,380   $25,050 
Nonperforming   5    8    1    —    —    1    —    15 
Total  $5,623   $10,153   $2,331   $990   $394   $1,194   $4,380   $25,065 
Current period gross charge-offs  $1   $17   $13   $—   $3   $13   $—   $47 
                                         
Total                                        
Payment Performance                                        
Performing  $91,160   $121,558   $86,337   $58,686   $28,586   $143,145   $81,417   $610,889 
Nonperforming   280    100    537    455    443    1,645    —    3,460 
Total  $91,440   $121,658   $86,874   $59,141   $29,029   $144,790   $81,417   $614,349 
Current period gross charge-offs  $1   $17   $13   $—   $3   $92   $—   $126 

 

 17

 

 

Modifications to Borrowers Experiencing Financial Difficulty

 

Occasionally, the Bank modifies loans to borrowers in financial distress by providing term extension, other-than-significant payment delay or interest rate reduction. In some cases, the Bank provides multiple types of concessions on one loan. Typically, one type of concession, such as an interest rate reduction, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as term extension, may be granted.

 

For the three months ended March 31, 2024 and 2023, the Bank did not grant any loan modifications to borrowers experiencing financial difficulty.

 

As of March 31, 2024 and December 31, 2023, the Bank has not initiated formal proceedings on any loans that have not been transferred into foreclosed assets.

 

Concentrations of Credit Risk

 

Most of the Corporation’s lending activity occurs within the Bank’s primary market area which encompasses Clinton, Columbia, Lycoming, Montour and Eastern Northumberland counties in Northcentral Pennsylvania. The majority of the Corporation’s loan portfolio consists of commercial and consumer real estate loans. As of March 31, 2024 and December 31, 2023, there were no concentrations of loans related to any single industry in excess of 10% of total loans.

 

5. DEPOSITS

 

Major classifications of deposits at March 31, 2024 and December 31, 2023 consisted of:

 

(In Thousands)  March 31, 2024   December 31, 2023 
Demand deposits  $263,954   $266,015 
Interest-bearing demand deposits   298,122    251,953 
Savings   203,002    204,968 
Money market   112,190    103,602 
Time deposits   336,232    324,131 
Total deposits  $1,213,500   $1,150,669 

 

Time deposits of $250,000 or more amounted to $100,236,000 and $94,445,000 as of March 31, 2024 and December 31, 2023, respectively.

 

6. BORROWED FUNDS

 

Short-term borrowings include repurchase agreements with customers and advances from the FHLB. As of March 31, 2024, the Bank was approved by the FHLB for borrowings of up to $544,914,000 of which $70,420,000 was outstanding in the form of advances and the FHLB had issued letters of credit on the Bank’s behalf totaling $106,300,000 against its borrowing capacity. Advances from the FHLB are secured by qualifying assets of the Bank. In addition to the outstanding balances noted below, the Bank also has additional lines of credit totaling $19,030,000 available from correspondent banks other than the FHLB. The outstanding balances and related information for short-term borrowings are summarized as follows:

 

             
   March 31, 2024 
       Maximum   Weighted 
   Ending   Month End   Average Rate 
(In Thousands)  Balance   Balance   At Period End 
Securities sold under agreements to repurchase  $121,913   $185,380    4.75%
Other short-term borrowings   4,000    34,000    5.67%
Total  $125,913   $219,380    4.78%

 

 18

 

 

             
   December 31, 2023 
       Maximum   Weighted 
   Ending   Month End   Average Rate 
(In Thousands)  Balance   Balance   At Period End 
Securities sold under agreements to repurchase  $189,532   $200,311    4.85%
Other short-term borrowings   63,000    63,000    5.68%
Total  $252,532   $263,311    5.10%

 

The Corporation utilizes securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents.

 

The remaining contractual maturity of repurchase agreements in the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 is presented in the following tables:

 

                          
   Remaining Contractual Maturity of the Agreements 
   Overnight  and           Greater than 90     
(In Thousands)  Continuous   Up to 30 Days   30-90 Days   Days   Total 
March 31, 2024                         
Securities sold under agreements to repurchase:                         
Obligation of U.S. Government Corporations and Agencies:                         
Mortgage-backed  $85,999   $—   $—   $—   $85,999 
Collateralized mortgage obligations   703    —    —    —    703 
Other   27,234    —    —    4,537    31,771 
Obligation of state and political subdivisions   3,440    —    —    —    3,440 
Total borrowings  $117,376   $—   $—   $4,537   $121,913 
                          
Gross amount of recognized liabilities for repurchase agreements       $121,913 
Amounts related to agreements not included in offsetting disclosure above       $— 

 

   Remaining Contractual Maturity of the Agreements 
   Overnight  and           Greater than 90     
(In Thousands)  Continuous   Up to 30 Days   30-90 Days   Days   Total 
December 31, 2023                         
Securities sold under agreements to repurchase:                         
Obligation of U.S. Government Corporations and Agencies:                         
Mortgage-backed  $93,137   $—   $—   $—   $93,137 
Other   92,151    1,663    1,094    1,487    96,395 
Total borrowings  $185,288   $1,663   $1,094   $1,487   $189,532 
                          
Gross amount of recognized liabilities for repurchase agreements       $189,532 
Amounts related to agreements not included in offsetting disclosure above       $— 

 

The fair value of securities pledged to secure repurchase agreements may decline. The Corporation manages this risk by having a policy to pledge securities valued at 110% of the gross outstanding balance of repurchase agreements. Securities sold under agreements to repurchase are secured by securities with a carrying amount of $139,482,000 and $219,227,000 at March 31, 2024 and December 31, 2023, respectively.

 

 19

 

 

Long-Term Borrowings

 

Long-term FHLB borrowings consisted of the following at March 31, 2024 and December 31, 2023:

 

         
(In Thousands)  March 31, 2024   December 31, 2023 
Loans maturing in 2024 with a weighted-average rate of 4.98%  $10,208   $15,208 
Loans maturing in 2025 with a weighted-average rate of 4.79%   15,208    15,208 
Loans maturing in 2026 with a weighted-average rate of 4.05%   15,359    15,359 
Loans maturing in 2027 with a weighted-average rate of 3.93%   15,417    15,417 
Loans maturing in 2028 with a weighted-average rate of 3.85%   10,228    10,229 
Total long-term FHLB borrowings   66,420    71,421 
Unamortized fair value adjustments   (896)   (973)
Total long-term borrowings  $65,524   $70,448 

 

Note: Weighted-average rates are presented as of March 31, 2024.

 

7. FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

 

The Corporation establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. The standard describes three levels of inputs that may be used to measure fair values:

 

  Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

 

  Level II: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments of which can be directly observed.

 

  Level III: Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgement or estimation.

 

This hierarchy requires the use of observable market data available.

 

The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of March 31, 2024 and December 31, 2023, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

                 
   March 31, 2024 
(In Thousands)  Level I   Level II   Level  III   Total 
Obligation of US Government Corporations and Agencies                
     Mortgage-backed  $—   $110,594   $—   $110,594 
     Collateralized mortgage obligations   —    8,049    —    8,049 
     Other   —    136,429    —    136,429 
Obligations of state and political subdivisions   —    84,247    —    84,247 
Other debt securities   —    275    —    275 
Total available-for-sale debt securities  $—   $339,594   $—   $339,594 
                     
Marketable equity securities  $1,178   $—   $—   $1,178 
                     
Real estate loans held for sale  $—   $614   $—   $614 

 

 20

 

 

                 
   December 31, 2023 
(In Thousands)  Level I   Level II   Level  III   Total 
Obligation of US Government Corporations and Agencies                
     Mortgage-backed  $—   $131,340   $—   $131,340 
     Collateralized mortgage obligations   —    9,018    —    9,018 
     Other   —    187,712    —    187,712 
Obligations of state and political subdivisions   —    84,956    —    84,956 
Other debt securities   —    276    —    276 
Total available-for-sale debt securities  $—   $413,302   $—   $413,302 
                     
Marketable equity securities  $1,295   $—   $—   $1,295 
                     
Real estate loans held for sale  $—   $366   $—   $366 

 

The fair values of equity securities classified as Level I are derived from quoted market prices in active markets; these assets consist entirely of stocks held in other banks. The fair values of all debt securities classified as Level II are obtained from nationally-recognized third-party pricing agencies. The fair values are derived primarily from cash flow models, which include assumptions for interest rates, credit losses, and prepayment speeds. The significant inputs utilized in the cash flow models are based on market data obtained from sources independent of the Corporation (observable inputs) and are therefore classified as Level II within the fair value hierarchy. The fair values of real estate loans held for sale classified as Level II are derived from observable pricing inputs for similar assets in active markets.

 

The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of March 31, 2024, and December 31, 2023, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

                 
   March 31, 2024 
(In Thousands)  Level I   Level II   Level  III   Total 
Assets Measured on a Non-recurring Basis:                    
Loans individually evaluated for credit loss  $—   $—   $8,116   $8,116 
   $—   $—   $8,116   $8,116 

 

   December 31, 2023 
(In Thousands)  Level I   Level II   Level  III   Total 
Assets Measured on a Non-recurring Basis:                    
Loans individually evaluated for credit loss  $—   $—   $8,136   $8,136 
   $—   $—   $8,136   $8,136 

 

The fair value of loans individually evaluated for credit loss are measured using a discounted cash flow approach.  Loans individually evaluated for credit loss are reviewed and evaluated on at least a quarterly basis for individual reserve requirements and adjusted accordingly. The following table provides a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques on a nonrecurring basis as of March 31, 2024 and December 31, 2023:

 

   March 31, 2024 
   Quantitative Information about Level III Fair Value Measurements 
(In Thousands)  Fair Value
Estimate		  

Valuation

Technique

 

Unobservable

Input

  Range   Weighted
Average		 
Loans individually evaluated for credit loss  $8,116   Discounted cash flows  Charge-off rates   0-100%    18.25%
                      

 

   December 31, 2023 
   Quantitative Information about Level III Fair Value Measurements 
(In Thousands)  Fair Value
Estimate		  

Valuation

Technique

 

Unobservable

Input

  Range   Weighted
Average		 
Loans individually evaluated for credit loss  $8,136   Discounted cash flows  Charge-off rates   0-100%    18.22%

 

 

 21

 

 

 At March 31, 2024 and December 31, 2023, the carrying values and fair values of financial instruments that are not recorded at fair value in the consolidated financial statements are presented in the table below:

 

                          
   March 31, 2024
(In Thousands)  Carrying
Amount		   Fair Value   Level I   Level II   Level III 
Financial assets:                         
Cash and cash equivalents  $16,231   $16,231   $16,231   $—    $—  
Interest-bearing time deposits   736    737    —     737    —  
Restricted equity securities   8,013    8,013    —     8,013    —  
Loans, net   1,071,396    991,967    —     —     991,967 
Accrued interest receivable   4,849    4,849    —     4,849      
Mortgage servicing rights   1,961    2,080    —     —     2,080 
                          
Financial liabilities:                         
Interest-bearing deposits  $949,546   $948,001   $—    $613,314   $334,687 
Noninterest-bearing deposits   263,954    263,954    —     263,954    —  
Short-term borrowings   125,913    125,913    —     125,913    —  
Long-term borrowings   65,524    63,965    —     —     63,965 
Accrued interest payable   2,281    2,281    —     2,281    —  

 

   December 31, 2023
(In Thousands)  Carrying
Amount		   Fair Value   Level I   Level II   Level III 
Financial assets:                         
Cash and cash equivalents  $18,377   $18,377   $18,377   $—    $—  
Interest-bearing time deposits   979    982    —     982    —  
Restricted equity securities   10,394    10,394    —     10,394    —  
Loans, net   1,059,127    972,834    —     —     972,834 
Accrued interest receivable   5,362    5,362    —     5,362      
Mortgage servicing rights   2,035    2,107    —     —     2,107 
                          
Financial liabilities:                         
Interest-bearing deposits  $884,654   $883,434   $—    $560,521   $322,913 
Noninterest-bearing deposits   266,015    266,015    —     266,015    —  
Short-term borrowings   252,532    252,532    —     252,532    —  
Long-term borrowings   70,448    68,887    —     —     68,887 
Accrued interest payable   2,358    2,358    —     2,358    —  
                          

 

Fair value is defined as a financial instrument which could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. If a quoted market price is available for a financial instrument, the estimated fair value would be calculated based upon the market price per trading unit of the instrument, but focuses on the exit price of the asset and liability.

 

If no readily available market exists, the fair value estimates for financial instruments should be based upon management’s judgment regarding current economic conditions, interest rate risk, expected cash flows, future estimate losses, and other factors as determined through various option pricing formulas. As many of these assumptions result from judgments made by management based upon estimates that are inherently uncertain, the resulting estimated fair values may not be indicative of the amount realizable in the sale of a particular financial instrument. In addition, changes in assumptions on which the estimate fair values are based may have a significant impact on the resulting estimated fair values.

 

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

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, represents an overview of the financial condition and results of operations of the Corporation and should be read in conjunction with the more detailed and comprehensive disclosures included in the Annual Report on Form 10-K for the year ended December 31, 2023. In addition, please read this section in conjunction with the unaudited consolidated financial statements and notes to the unaudited consolidated financial statements contained in Item 1, “Financial Statements” of Part I to this Quarterly Report on Form 10-Q.

 

The Corporation is in the business of providing customary retail, commercial banking and financial services to individuals, businesses and local governments through its 22 branch offices operated by Journey Bank, the Corporation’s wholly-owned subsidiary. The Corporations 22 branch offices are operated in Clinton, Columbia, Lycoming, Montour and Northumberland counties in central Pennsylvania.

 

CAUTIONARY STATEMENT

 

Certain statements in this section and elsewhere in this Quarterly Report on Form 10- Q, other periodic reports filed by us under the Securities Exchange Act of 1934, as amended, and any other written or oral statements made by or on behalf of us may include “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 which reflect our current views with respect to future events and financial performance. Such forward looking statements are based on general assumptions and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. These risks, uncertainties and other factors include, but are not limited to:

 

●Our business and financial results are affected by business and economic conditions, both generally and specifically in the mostly North Central Pennsylvania market in which we operate.

 

●Changes in interest rates and valuations in the debt, equity and other financial markets.

 

●Disruptions in the liquidity and other functioning of financial markets, including such disruptions in the market for real estate and other assets commonly securing financial products.

 

●Actions by the Federal Reserve Board and other government agencies, including those that impact money supply and market interest rates.

 

●Changes in our customers’ and suppliers’ performance in general and their creditworthiness in particular.

 

●Changes in customer preferences and behavior, whether as a result of changing business and economic conditions or other factors.

 

●Changes resulting from the enacted Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

●A continuation of recent turbulence in significant segments of the United States and global financial markets, particularly if it worsens, could impact our performance, both directly by affecting our revenues and the value of our assets and liabilities and indirectly by affecting our customers and suppliers and the economy generally.

 

●Our business and financial performance could be impacted as the financial industry restructures in the current environment by changes in the competitive landscape.

 

●Given current economic and financial market conditions, our forward-looking statements are subject to the risk that these conditions will be substantially different than we are currently expecting. These statements are based on our current expectations that interest rates will remain at similar levels throughout 2024.

 

●Legal and regulatory developments could have an impact on our ability to operate our businesses or our financial condition or results of operations or our competitive position or reputation. Reputational impacts, in turn, could affect matters such as business generation and retention, our ability to attract and retain management, liquidity and funding. These legal and regulatory developments could include: (a) the unfavorable resolution of legal proceedings or regulatory and other governmental inquiries; (b) increased litigation risk from recent regulatory and other governmental developments; (c) the results of the regulatory examination process, and regulators’ future use of supervisory and enforcement tools; (d) legislative and regulatory reforms, including changes to laws and regulations involving tax, pension, education and mortgage lending, the protection of confidential customer information, and other aspects of the financial institution industry; and (e) changes in accounting policies and principles.

 

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●Our business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through the effective use of third-party insurance and capital management techniques.

 

●Our ability to anticipate and respond to technological changes can have an impact on our ability to respond to customer needs and to meet competitive demands.

 

●Our ability to implement our business initiatives and strategies could affect our financial performance over the next several years.

 

●Competition can have an impact on customer acquisition, growth and retention, as well as on our credit spreads and product pricing, which can affect market share, deposits and revenues.

 

●Our business and operating results can also be affected by widespread natural disasters, terrorist activities or international hostilities, either as a result of the impact on the economy and capital and other financial markets generally or on us or on our customers and suppliers.

 

The words “believe,” “expect,” “anticipate,” “project” and similar expressions signify forward looking statements. Readers are cautioned not to place undue reliance on any forward looking statements made by or on behalf of us. Any such statement speaks only as of the date the statement was made. We undertake no obligation to update or revise any forward looking statements.

 

The following discussion and analysis should be read in conjunction with the detailed information and consolidated financial statements, including notes thereto, included elsewhere in this report. Our consolidated financial condition and results of operations are essentially those of our subsidiary, the Bank. Therefore, the analysis that follows is directed to the performance of the Bank.

 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

 

The Corporation’s financial statements have been prepared in accordance with U.S. GAAP and conform to general practices within the banking industry. In the preparation of its financial statements, the Corporation is required to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. The Corporation’s critical accounting policies are fundamental to understanding this MD&A and are more fully described in Note 1 (“Summary of Significant Accounting Policies”) within the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023.

 

The Corporation defines its critical accounting policies, in accordance with U.S. GAAP. U.S. GAAP requires the Corporation to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on its financial condition and results of operations, as well as the specific manner in which those principles are applied. Application of assumptions different than those used by the Corporation could result in material changes in the Corporation’s financial position or results of operations. The Corporation believes its policies governing the determination of the allowance for credit/loan losses, the fair value of available-for-sale debt securities and the fair values of assets acquired and liabilities assumed in business combinations are critical accounting policies. The Corporation’s management has reviewed and approved these critical accounting policies and has discussed these policies with its Audit Committee. The Corporation believes the critical accounting policies used in the preparation of its financial statements that require significant estimates and judgments are as follows:

 

Allowance for Credit Losses (ACL) - Loans

 

As of January 1, 2023, the Corporation adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments,” which replaced the current loss impairment methodology under U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates in an effort to provide financial statement users with more decision- useful information about the expected credit losses on financial instruments and other commitments to extend credit. ASU 2016-13, commonly referred to as Current Expected Credit Losses (“CECL”), requires a financial asset (or a group of financial assets) to be measured at an amortized cost basis and presented at the net amount expected to be collected. The amendments in this update affect financial assets and net investment in leases that are not accounted for at fair value through net income, including such financial assets as loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. Upon adoption of ASU 2016-13 on January 1, 2023, the Corporation recorded an incremental decrease in the ACL through a cumulative effect adjustment to equity, net of tax, with subsequent adjustments charged to earnings through a provision for credit losses.

 

Management evaluates the credit quality of the Corporation’s loan portfolio on an ongoing basis and performs a formal review of the adequacy of the ACL on a quarterly basis. The ACL is established through a provision for credit losses charged to earnings and is maintained at a level that management considers to be an estimate of the lifetime expected credit losses of the portfolio as of the evaluation date. Loans, or portions of loans, determined by management to be uncollectible are charged off against the ACL, while recoveries of amounts previously charged off are credited to the ACL.

 

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Determining the amount of the ACL is considered a critical accounting estimate because it requires significant judgment and the use of estimates related to the amount and timing of expected future cash flows, estimated losses on pools of homogeneous loans based on historical loss experience and reasonable and supportable forecasts, as well as consideration of current economic trends and conditions, all of which may be susceptible to significant change. Banking regulators, as an integral part of their examination of the Corporation, also review the ACL, and may require, based on information available to them at the time of their examination, that certain loan balances be charged off or require that adjustments be made to the ACL. Additionally, the ACL is determined, in part, by the composition and size of the loan portfolio.

 

The ACL consists of two components, a specific component and a general component. The specific component relates to loans that are individually analyzed for impairment. For such loans, an allowance is established when the discounted cash flows, collateral value or observable market price of the loan is lower than the carrying value of that loan. The general component covers all other loans and is based on historical loss experience adjusted. The general reserve component of the ACL is based on pools of performing loans segregated by loan segment. Historical loss factors are applied based on historical losses in each risk rating category to determine the appropriate reserve related to those loans.

 

Although the Corporation’s management uses the best information available, the level of the ACL remains an estimate which is subject to significant judgment and short-term change which could have a significant impact on the Corporation’s financial condition or results of operations. From January 1, 2024 to March 31, 2024, the level of the ACL increased from $9.3 million to $9.4 million and the ACL to total loans remained consistent at 0.87%. The Corporation’s ACL is highly sensitive to the methods, assumptions and estimates underlying its calculation. See Note 4 “Loans and Allowance for Credit Losses” within the Corporation’s Notes to the Unaudited Consolidated Financial Statements which are included in Part I of this Quarterly Report on Form 10-Q for additional qualitative and quantitative information about the Corporation’s ACL.

 

Fair Value of Available-For-Sale Debt Securities

 

Another material estimate is the calculation of fair values of the Corporation’s debt securities. For the Corporation’s debt securities, the Corporation receives estimated fair values from an independent valuation service, or from brokers. In developing fair values, the valuation service and the brokers compare securities that have similar maturities, coupon rates, and credit ratings. Estimated fair values of debt securities may vary among brokers and other valuation services.

 

Business Combinations

 

Business combinations are accounted for by applying the acquisition method. As of acquisition date, the identifiable assets acquired and liabilities assumed are measured at fair value and recognized separately from goodwill. Results of operations of the acquired entity are included in the consolidated statement of income from the date of acquisition. The calculation of intangible assets including core deposits and the fair value of loans are based on significant judgements. Core deposit intangibles are calculated using a discounted cash flow model based on various factors including discount rate, attrition rate, interest rate, cost of alternative funds and net maintenance costs. Loans acquired in connection with acquisitions are recorded at their acquisition-date fair value. Determining the fair value of the acquired loans involves estimating the principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. Management considers a number of factors in evaluating the acquisition-date fair value including the remaining life of the acquired loans, delinquency status, estimated prepayments, payment options and other loan features, internal risk grade, estimated value of the underlying collateral and interest rate environment.

 

MERGER WITH MUNCY BANK FINANCIAL, INC.

 

The Corporation’s merger with Muncy Bank Financial, Inc. (“MBF”) was completed November 11, 2023. MBF was a Pennsylvania corporation that conducted its business primarily through its wholly owned subsidiary The Muncy Bank & Trust Company, which operated from a main office in Muncy, Pennsylvania, and had nine additional branches throughout Northcentral Pennsylvania.

 

At the effective time of the merger, MBF’s shareholders received a fixed exchange ratio of 0.9259 shares of the Corporation’s common stock for each MBF common share they owned, except to the extent of cash received for fractional shares at $41.47 per share. Total purchase consideration was $55,101,000, including common stock with a fair value of $55,092,000 and cash of $9,000 paid for fractional shares. Holders of MBF common stock prior to the consummation of the merger held approximately 41.7% of the Corporation’s common stock outstanding immediately following the merger.

 

In connection with the acquisition, effective November 11, 2023, the Corporation recorded goodwill of $ 17.7 million and a core deposit intangible asset of $12.1 million. Assets acquired totaled $671.4 million, including gross loans valued at $504.1 million, available-for-sale debt securities valued at $93.0 million, bank-owned life insurance valued at $17.8 million and premises and equipment, net, valued at $14.9 million. Liabilities assumed totaled $634.0 million, including deposits valued at $521.3 million and borrowings valued at $105.5 million. The assets purchased and liabilities assumed in the acquisition were recorded at their preliminary estimated fair values at the time of closing and may be adjusted for up to one year subsequent to the acquisition.

 

25 

 

 

For the three months ended March 31, 2024, the Corporation incurred pre-tax merger-related expenses related to the MBF transaction of $96,000, compared to $0 for the three months ended March 31, 2023 and $3.0 million for the year ended December 31, 2023. Merger-related expenses include voluntary severance and similar expenses as well as expenses related to conversion of MBF’s core banking system into the Corporation’s core system and legal and other professional expenses.

 

FINANCIAL CONDITION

 

Total assets at March 31, 2024, were $1.573 billion, a decrease of $66.5 million, or 4.1% from $1.640 billion at December 31, 2023. The change in total assets primarily reflected decreases in cash and cash equivalents, available-for-sale debt securities, and restricted investment in bank stocks, partially offset by an increase in loans receivable. Cash and cash equivalents decreased $2.1 million, available-for-sale debt securities decreased $73.7 million, and restricted investment in bank stocks decreased $2.4 million. Gross loans receivable increased $12.3 million. Total liabilities at March 31, 2024, were $1.418 billion, a decrease of $67.5 million, or 4.5% from $1.486 billion at December 31, 2023. Deposit balances increased by $62.8 million, short-term borrowings decreased $126.7 million and long-term borrowings decreased $4.9 million since December 31, 2023.

 

Total average assets increased 67.0% from $952.2 million for the three months ended March 31, 2023, to $1.590 billion for the three months ended March 31, 2024, primarily related to the MBF merger. Average earning assets were $1.493 billion for the three months ended March 31, 2024 and $889.0 million for the three months ended March 31, 2023. Average interest- bearing liabilities were $1.171 billion for the three months ended March 31, 2024 and $683.5 million for the three months ended March 31, 2023.

 

Cash and cash equivalents decreased $2.1 million or 11.7% from $18.4 million at December 31, 2023 to $16.2 million at March 31, 2024. This decrease is primarily related to reduced branch cash levels as well as the timing of items clearing through correspondent bank balances.

 

Available-for-sale debt securities decreased $73.7 million to $339.6 million at March 31, 2024 from $413.3 million at December 31, 2023. On January 17, 2024, the Corporation sold available- for-sale debt securities with a total market value of $50.3 million, the proceeds of which were utilized to paydown short-term FHLB borrowings. Securities sold included $34.2 million of US government agency securities, $15.5 million of mortgaged-backed securities and $563,000 of collateralized mortgage obligations. In addition to the securities sold during the quarter, the Corporation received proceeds from paydowns, calls and maturities of available-for-sale debt securities of $21.7 million during the quarter.

 

Restricted investment in bank stocks decreased $2.4 million to $8.0 million at March 31, 2024 from $10.4 million at December 31, 2023. This decrease is directly attributable to the decrease in required FHLB stock holdings due to the paydown in short and long-term FHLB borrowings.

 

Gross loans not held for sale increased 1.2% to $1.081 billion at March 31, 2024 from $1.068 billion at December 31, 2023.

This increase is related to strong loan demand in the first three months of 2024.

 

Interest-bearing deposits increased $ 64.9 million to $949.5 million at March 31, 2024 from $884.7 million at December 31, 2023. Noninterest-bearing deposits decreased 0.8% from $266.0 million at December 31, 2023 to $ 264.0 million at March 31, 2024. The increase in interest-bearing deposits during the quarter-ended March 31, 2024 was as a result of a strategic initiative to reposition customer repurchase agreements, which are classified as short-term borrowings, into core deposit accounts. The Bank anticipates a continued migration of customer repurchase accounts from short-term borrowings to interest bearing deposits throughout 2024. The decrease in noninterest-bearing deposits is as a result of the migration of deposits from noninterest-bearing to interest bearing due to the rate environment.

 

Short-term borrowings decreased $126.7 million to $125.9 million at March 31, 2024 from $252.5 million at December 31, 2023. This change was primarily related to the migration of customer repurchase agreements as well as a paydown in short-term FHLB borrowings during the quarter discussed above.

 

Long-term borrowings were $65.5 million at March 31, 2024 compared to $70.4 million at December 31, 2023. This decrease is primarily related to a $5.0 million long-term borrowing maturity during the first quarter.

 

Total stockholder’s equity increased by $1.0 million, or 0.7%, from $153.8 million at December 31, 2023, to $154.9 million at March 31, 2024. The increase is primarily attributable to earnings, net of cash dividends for the quarter, partially offset by an increase in accumulated other comprehensive loss due to changes in the fair values of available-for-sale investment securities. Accumulated other comprehensive loss amounted to $16.5 million as of March 31, 2024 and $15.0 million as of December 31, 2023.

 

26 

 

 

The loan-to-deposit ratio is a key measurement of liquidity. Our loan-to-deposit ratio decreased from 92.0% as of December 31, 2023 to 88.3% as of March 31, 2024 due to the asset/liability mix changes noted above, and remains within internal policy limits.

 

It is our opinion that the asset/liability mix and the interest rate risk associated with the balance sheet are within manageable parameters. Constant monitoring using asset/liability reports and interest rate risk scenarios are in place along with quarterly asset/liability management meetings on the committee level by the Bank’s Board of Directors. Additionally, the Bank’s Asset/Liability Committee meets quarterly with an investment consultant and works with independent third parties regularly to review key assumptions and other metrics used in the modeling software.

 

Securities

 

The Corporation’s investment securities portfolio provides a source of liquidity needed to meet expected loan demand and interest income to increase profitability. Additionally, the investment securities portfolio is used to meet pledging requirements to secure public deposits, customer repurchase agreements and for other purposes. Debt securities are classified as either available-for-sale or held-to-maturity at the time of purchase based on management's intent. Available-for-sale securities are carried at fair value, with unrealized holding gains and losses reported as a component of stockholders’ equity in accumulated other comprehensive income (loss), net of tax, while held-to-maturity securities are carried at amortized cost. At March 31, 2024 and December 31, 2023, all debt securities were classified as available-for-sale. Equity securities with readily determinable fair values are carried at fair value, with gains and losses due to fluctuations in market value included in the Consolidated Statements of Income. Securities with limited marketability and/or restrictions, such as FHLB of Pittsburgh stock, are carried at cost. Decisions to purchase or sell investment securities are based upon management’s current assessment of long- and short-term economic and financial conditions, including the interest rate environment and asset/liability management, liquidity and tax-planning strategies.

 

At March 31, 2024, the investment portfolio was comprised principally of available-for-sale debt securities including, fixed-rate, taxable and tax-exempt obligations of state and political subdivisions and fixed-rate and floating-rate securities issued by U.S. government or U.S. government-sponsored agencies, which include agencies, mortgage-backed securities and collateralized mortgage obligations, or CMOs. Additionally, the Corporation holds equity investments in the stock of certain publicly traded bank holding companies. Except for U.S. government and government-sponsored agencies, there were no securities of any individual issuer that exceeded 10.0% of shareholders’ equity as of March 31, 2024.

 

The majority of the Corporation's debt securities are fixed-rate instruments and inherently subject to interest rate risk, as the value of fixed-rate securities fluctuates with changes in interest rates. Generally, a security's value reacts inversely with changes in interest rates. Available-for-sale securities are carried at fair value, with unrealized gains or losses reported in the accumulated other comprehensive income or loss component of stockholder's equity, net of deferred income taxes. At March 31, 2024, the Corporation reported a net unrealized loss, included in accumulated other comprehensive loss, of $16.5 million, net of deferred income taxes of $4.4 million, an increase of $1.5 million compared to the net unrealized holding loss of $15.0 million, net of deferred income taxes of $4.0 million, at December 31, 2023. Any future changes in interest rates could result in changes in the fair value of the Corporation’s securities portfolio and capital position. However, accumulated other comprehensive income and loss related to available-for-sale debt securities is excluded from regulatory capital and does not have an impact on the Corporation's regulatory capital ratios.

 

The following table presents the carrying value of available-for-sale debt securities, at fair value at March 31, 2024 and December 31, 2023:

 

   March 31, 2024   December 31, 2023 
   Amortized   Fair   Amortized   Fair 
(In Thousands)  Cost   Value   Cost   Value 
AVAILABLE-FOR-SALE DEBT SECURITIES:                    
Obligation of U.S.Government Corporations and Agencies:                    
Mortgage-backed  $126,286   $110,594   $145,196   $131,340 
Collateralized mortgage obligations   7,698    8,049    8,515    9,018 
Other   145,000    136,429    197,325    187,712 
Obligations of state and political subdivisions   81,261    84,247    81,033    84,956 
Other debt securites   268    275    267    276 
Total available-for-sale debt securities  $360,513   $339,594   $432,336   $413,302 
                     
Aggregate Unrealized (Loss) Gain       $(20,919)       $(19,034)
Aggregate Unrealized (Loss) Gain as a % of Amortized Cost        (5.8%)        (4.4%)

 

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The following table presents the weighted-average yields on available-for-sale debt securities by major category and maturity period at March 31, 2024. Yields are calculated on the basis of the amortized cost and weighted for the scheduled maturity of each security. Because mortgage-backed securities and collateralized mortgage obligations are not due at a single maturity date, they are not included in the maturity categories in the following summary.

 

   Within       One-       Five-       After             
   One       Five       Ten       Ten             
(Dollars In Thousands)  Year   Yield   Years   Yield   Years   Yield   Years   Yield   Total   Yield 
AVAILABLE-FOR-SALE DEBT SECURITIES:                                                  
Obligation of U.S. Government Corporations and Agencies:                                                  
Other  $34,000    0.55%  $111,000    1.05%  $—    —   $—    —   $145,000    0.94%
Obligations of state and political subdivisions   887    2.75%   6,109    4.01%   22,009    4.04%   52,256    4.45%   81,261    4.28%
Other debt securities   —    —    95    5.24%   173    5.39%   —    —    268    5.34%
Sub-total  $34,887    0.89%  $117,204    1.47%  $22,182    4.04%  $52,256    4.43%  $226,529    2.32%
                                                   
Mortgage-backed securities                                           126,286    1.77%
Collateralized mortgage obligations                                           7,698    4.89%
Total                                          $360,513    2.07%

 

Marketable Equity Securities

 

At March 31, 2024 and December 31, 2023, the Corporation had $1.2 million and $1.3 million in equity securities recorded at fair value, respectively. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three months ended March 31, 2024 and 2023:

 

   For the Three Months Ended  
   March 31, 
(In Thousands)  2024   2023 
Net losses recognized during the period on marketable equity securities  $(117)  $(81)
           
Less: Net gains and losses recognized during the period on marketable equity securities dold during the period   —    — 
           
Unrealized losses recognized during the period on marketable equity securities still held at the reporting date  $(117)  $(81)

 

See Note 3 within the Corporation’s Notes to the Unaudited Consolidated Financial Statements which are included in this Quarterly Report on Form 10-Q for more information regarding Corporation’s investment portfolio as of March 31, 2024.

 

Loans

 

Gross loans receivable increased 1.2% from $1.068 billion at December 31, 2023 to $1.081 billion at March 31, 2024. The percentage distribution in the loan portfolio is shown in the tables below:

 

   March 31, 2024 
(In Thousands)  Amount   % 
Commercial and industrial  $98,902    9.2%
Commercial real estate:          
Commercial mortgages   327,987    30.3%
Student housing   35,466    3.3%
Residential real estate:          
Rental 1-4 family   56,125    5.2%
1-4 family residential mortgages   537,855    49.8%
Consumer and other   24,412    2.3%
Gross loans  $1,080,747    100.0%

 

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   December 31, 2023 
(In Thousands)  Amount   % 
Commercial and industrial  $94,278    8.8%
Commercial real estate:          
Commercial mortgages   326,152    30.5%
Student housing   33,650    3.1%
Residential real estate:          
Rental 1-4 family   54,078    5.1%
1-4 family residential mortgages   535,206    50.1%
Consumer and other   25,065    2.3%
Gross loans  $1,068,429    100.00%

 

Loan concentrations are considered to exist when there are amounts loaned to a number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. Our lending activity is heavily concentrated in the geographic market areas we serve. This geographic concentration subjects our loan portfolio to the general economic conditions within the state. The risks created by this concentration have been considered by management and are monitored on an ongoing basis. As of March 31, 2024 and December 31, 2023, there were no concentrations of loans exceeding 10% of total loans other than the categories of loans disclosed in the table above. We believe our loan portfolio is diversified relative to industry concentrations across the various loan portfolio categories.

 

Banking regulators have established guidelines of less than 100% of tier 1 capital plus allowance for credit losses in construction lending and less than 300% of tier 1 capital plus allowance for credit losses in commercial real estate lending that management monitors as part of the risk management process. The construction concentration ratio is a percentage of the outstanding construction and land development loans to total tier 1 capital plus allowance for credit losses. The commercial real estate concentration ratio is a percentage of the outstanding balance of non-owner occupied commercial real estate, multifamily, and construction and land development loans to tier 1 capital plus allowance for credit losses. At March 31, 2024, the Bank’s exposure to commercial real estate was well below these guidelines.

 

As of March 31, 2024, commercial real estate loans totaled $363.5 million or 33.6% of total gross loans. Of this amount commercial mortgage loans represented $328.0 million or 30.3% of total gross loans and student housing loans represented $35.5 million or 3.3% of total gross loans. The following table presents the distribution of commercial mortgage loans and related percentage of the total loan portfolio as of March 31, 2024:

 

   March 31, 2024 
(In Thousands)  Amount   % 
Commercial mortgages:          
Commercial construction  $21,845    2.0%
Multifamily   72,053    6.7%
Owner occupied nonfarm nonresidential   100,630    9.3%
Non-owner occupied nonfarm nonresidential   95,912    8.9%
Other commercial   37,547    3.5%
Total commercial mortgages  $327,987    30.3%

 

The following table presents the maturity distribution and interest rate information of the loan portfolio by major category as of March 31, 2024:

 

   As of March 31, 2024 
                                             
   Fixed-Rate Loans   Variable- or Adjustable-Rate Loans   All Loans 
   1 Year   1-5   5-15   >15       1 Year   1-5   5-15   >15         
(In Thousands)  or Less   Years   Years   Years   Total   or Less   Years   Years   Years   Total   Total 
Commercial and industrial  $8,254   $18,121   $17,431   $129   $43,935   $12,885   $3,120   $22,429   $16,533   $54,967   $98,902 
Commercial real estate:                                                       
Commercial mortgages   2,750    2,568    17,192    3,966    26,476    12,331    7,585    72,558    209,037    301,511    327,987 
Student housing   —    681    2,110    —    2,791    1,722    1,068    19,981    9,904    32,675    35,466 
Residential real estate:                                                       
Rental 1-4 family   424    227    1,324    251    2,226    2,106    1,707    7,997    42,089    53,899    56,125 
1-4 family residential mortgages   3,694    7,604    66,925    35,433    113,656    11,216    1,910    38,963    372,110    424,199    537,855 
Consumer and other   1,200    8,365    3,246    526    13,337    122    337    3,546    7,070    11,075    24,412 
Total  $16,322   $37,566   $108,228   $40,305   $202,421   $40,382   $15,727   $165,474   $656,743   $878,326   $1,080,747 

 

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See Note 4 within the Corporation’s Notes to the Unaudited Consolidated Financial Statements which are included in this Quarterly Report on Form 10-Q for more information regarding the Corporation’s loan portfolio as of March 31, 2024.

 

Allowance for Credit Losses

 

The allowance for credit losses was $9.4 million at March 31, 2024, compared to $9.3 million at December 31, 2023. This allowance equaled 0.87% of total loans, net of unearned fees and costs and unamortized fair value adjustments, at both March 31, 2024 and December 31, 2023. The allowance for credit losses was analyzed quarterly and reviewed by the Corporation’s Board of Directors. No concentration or apparent deterioration in classes of loans or pledged collateral was evident. Regular loan meetings with the Corporation’s Board of Directors reviewed new loans. Delinquent loans, loan exceptions and certain large loans are addressed by the full Board no less than monthly to determine compliance with policies.

 

The following tables present the allocation of the allowance for credit losses as of March 31, 2024 and December 31, 2023:

 

   March 31, 2024 
(dollars in thousands)  Allowance for Credit Losses   Percent of Allowance   Percent of Loans to Gross Loans 
Commercial and industrial  $712    7.6%   9.2%
Commercial real estate   7,166    76.6%   33.6%
Residential real estate   1,062    11.4%   55.0%
Consumer and other   411    4.4%   2.3%
Total  $9,351    100.0%   100.0%

 

   December 31, 2023 
(dollars in thousands)  Allowance for Credit Losses   Percent of Allowance   Percent of Loans to Gross Loans 
Commercial and industrial  $801    8.6%   8.8%
Commercial real estate   6,847    73.6%   33.7%
Residential real estate   1,474    15.8%   55.2%
Consumer and other   180    1.9%   2.3%
Total  $9,302    99.5%   100.0%

 

See Note 4 within the Corporation’s Notes to the Unaudited Consolidated Financial Statements which are included in this Quarterly Report on Form 10-Q for more information regarding the Corporation’s allowance for credit losses as of March 31, 2024.

 

Deposits

 

Total deposits averaged $1.153 billion in the first quarter 2024, an increase of $474.4 million, or 69.9%, compared to $678.5 million in the first quarter 2023. All segments of the Corporation’s deposit portfolio increased from the first quarter 2023 to the first quarter 2024 due to the MBF merger. The Corporation’s deposit funding costs increased 124 basis points to 1.61% in the first quarter 2024 from 0.37% in the first quarter 2023. Rates on interest-bearing demand deposits, money market deposits and time deposits increased by 121 basis points, 62 basis points, and 258 basis points, respectively, comparing the first quarters of 2024 and 2023.

 

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The average balance and average rate paid on deposits are summarized as follows:

 

   For the Three Months Ended         
   March 31, 2024   March 31, 2023         
   Average   Average   Average   Average   Balance Change 
   Balance   Rate   Balance   Rate   Amount   % 
(In Thousands)                        
Non-interest bearing  $254,129    —%  $176,403    —%  $77,726    44.1%
Savings   203,003    0.03    169,236    0.03    33,767    20.0 
Interest-bearing demand deposits   257,791    1.25    155,357    0.04    102,434    65.9 
Money market deposits   104,095    1.87    50,907    1.25    53,188    104.5 
Time deposits   333,875    3.99    126,608    1.41    207,267    163.7 
Total deposits  $1,152,893    1.61%  $678,511    0.37%  $474,382    69.9%

 

At March 31, 2024, estimated uninsured deposits, or the portion of deposit accounts which exceeded the Federal Deposit Corporation insurance limit, totaled $311.9 million. Of this amount, $136.2 million was collateralized by securities pledged by the Corporation or letters of credit issued through the Federal Home Loan Bank of Pittsburgh. Time deposits of $250,000 or more totaled approximately $100.2 million at March 31, 2024.

 

See Note 5 within the Corporation’s Notes to the Unaudited Consolidated Financial Statements which are included in this Quarterly Report on Form 10-Q for more information regarding the Corporation’s deposits as of March 31, 2024.

 

Borrowings

 

The average balance of short-term borrowings, including securities sold under agreements to repurchase and day-to-day FHLB - Pittsburgh borrowings increased $21.2 million or 11.7% from $181.4 million in the first quarter 2023 to $202.7 million in the first quarter 2024. Average short-term borrowings amounted to 17.3% of total interest-bearing liabilities for the three months ended March 31, 2024 as compared to 26.5% for the three months ended March 31, 2023. Short-term borrowings consist primarily of securities sold under agreements to repurchase and periodic overnight or short-term Federal Home Loan Bank advances.

 

Long-term borrowings consist of advances due to the FHLB - Pittsburgh. Under terms of a blanket agreement, the loans are secured by certain qualifying assets of the Bank which consist principally of first mortgage loans. The carrying value of these collateralized items was $788.4 million at March 31, 2024. The Bank has lines of credit with the Federal Reserve Bank Discount Window, FHLB – Pittsburgh, and Atlantic Community Bankers Bank in the aggregate amount of $563.9 million at March 31, 2024. The unused portion of these lines of credit was $386.3 million at March 31, 2024.

 

See Note 6 within the Corporation’s Notes to the Unaudited Consolidated Financial Statements which are included in this Quarterly Report on Form 10-Q for more information regarding the Corporation’s borrowings as of March 31, 2024.

 

Capital Resources

 

Management believes, as of March 31, 2024, that Journey Bank meets all capital adequacy requirements to which it is subject. Management annually performs stress testing on its regulatory capital levels and expects Journey Bank to maintain capital levels that exceed the regulatory standards for well-capitalized institutions for the next 12 months and for the foreseeable future.

 

Future dividend payments and repurchases of common stock will depend upon maintenance of a strong financial condition, future earnings and capital and regulatory requirements. In addition, Journey Bank is subject to restrictions on the amount of dividends that may be paid without approval of banking regulatory authorities. Further, although Muncy Columbia Financial Corporation is not subject to the specific consolidated capital requirements, its ability to pay dividends, repurchase stock or engage in other activities may be limited by the Federal Reserve if it fails to hold sufficient capital commensurate with its overall risk profile.

 

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The following table reflects the Bank’s actual capital amounts and ratios at March 31, 2024 and December 31, 2023:

 

   Journey Bank   Minimum Required For Capital Adequacy Purposes   Minimum Required For Capital Adequacy Purposes with Conservation Buffer   Minimum Required To Be Well Capitalized Under Prompt Corrective Action Regulations 
(Dollars in Thousands)  Amount   Ratio   Ratio   Ratio   Ratio 
March 31, 2024                         
Total capital (to risk-weighted assets)  $141,153    14.94%   8.00%   10.50%   10.00%
                          
Tier I capital (to risk-weighted assets)   131,786    13.95%   6.00%   8.50%   8.00%
                          
Tier I common equity (to risk-weighted assets)   131,786    13.95%   4.50%   7.00%   6.50%
                          
Tier I capital (to average assets)   131,786    8.41%   4.00%   4.00%   5.00%
                          
Total risk-weighted assets   944,875                     
                          
Total average assets   1,567,529                     

 

   Journey Bank   Minimum Required For Capital Adequacy Purposes   Minimum Required For Capital Adequacy Purposes with Conservation Buffer   Minimum Required To Be Well Capitalized Under Prompt Corrective Action Regulations 
(Dollars in Thousands)  Amount   Ratio   Ratio   Ratio   Ratio 
December 31, 2023                         
Total capital (to risk-weighted assets)  $138,382    14.49%   8.00%   10.50%   10.00%
                          
Tier I capital (to risk-weighted assets)   129,053    13.52%   6.00%   8.50%   8.00%
                          
Tier I common equity (to risk-weighted assets)   129,053    13.52%   4.50%   7.00%   6.50%
                          
Tier I capital (to average assets)   129,053    8.03%   4.00%   4.00%   5.00%
                          
Total risk-weighted assets   954,878                     
                          
Total average assets   1,607,661                     

 

RESULTS OF OPERATIONS

 

Net income for the three months ended March 31, 2024 amounted to $4.0 million, or $1.13 per share, an increase of $2.1 million, or 108.0%, compared to $1.9 million, or $0.93 per share, for the three months ended March 31, 2023. The increase in net income for the three months ended March 31, 2024, compared to the same period in 2023, was primarily attributable to the MBF merger.

 

Net interest income increased $6.7 million, or 129.5% to $11.9 million for the three months ended March 31, 2024, from $5.2 million for the three months ended March 31, 2023. Non-interest income was $2.5 million for the three months ended March 31, 2024, an increase of $0.9 million, or 55.7%, from $1.6 million for the three months ended March 31, 2023, which primarily related to increases in interchange fees and other non-interest income. Non-interest expense was $9.6 million for the three months ended March 31, 2024, an increase of $4.8 million, or 100.2%, from $4.8 million for the three months ended March 31, 2023, which was primarily related to increases in expenses related to the MBF merger.

 

Net Interest Income

 

Net interest income is the difference between (i) interest income, interest and fees on interest-earning assets, and (ii) interest expense, interest paid on deposits and borrowed funds. Net interest income represents the largest component of the Corporation’s operating income and, as such, is the primary determinant of profitability. Net interest income is impacted by variations in the volume, rate and composition of earning assets and interest-bearing liabilities, changes in general market interest rates and the level of non-performing assets. Interest income is shown on a fully tax-equivalent basis using the corporate statutory tax rate of 21.0% in 2024 and 2023.

 

Tax-equivalent net interest income increased $6.9 million, or 130.8%, to $12.2 million for the three months ended March 31, 2024, compared to $5.3 million for the three months ended March 31, 2023. The increase in tax-equivalent net interest income was due to an increase in tax-equivalent interest income reflecting higher earning asset volumes and yields, partially offset by an increase in interest expense which resulted primarily from an increase in interest-bearing deposits and increased utilization of borrowed funds. Tax-equivalent net interest margin, a key measurement used in the banking industry to measure income from earning assets relative to the cost to fund those assets, is calculated by dividing tax-equivalent net interest income by average interest-earning assets. The Corporation’s tax-equivalent net interest margin increased 91 basis points to 3.32% for the three months ended March 31, 2024, compared to 2.41% for the three months ended March 31, 2023, which was largely caused by higher yields on earning assets outpacing the increase funding costs. The Corporation’s interest rate spread, the difference between the average yield on interest-earning assets, shown on a fully tax-equivalent basis, and the average cost of interest-bearing liabilities, also increased comparing the three months ended March 31, 2024 and 2023. The Corporation’s rate spread was 2.70% for the three months ended March 31, 2024, an increase of 63 basis points as compared to 2.07% for the three months ended March 31, 2023.

 

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Tax-equivalent interest income increased $12.5 million, or 161.7%, to $20.2 million for the three months ended March 31, 2024, from $7.7 million for the three months ended March 31, 2023, which was largely caused by significant increases in average earning assets due to the MBF merger, coupled with an increase in the tax-equivalent yield on average earning assets. Average earning assets increased $604.0 million, or 67.9%, to $1.493 billion for the three months ended March 31, 2024, from $889.0 million for the three months ended March 31, 2023, resulting in a corresponding increase to tax-equivalent interest income of $7.2 million. Specifically, average loans increased $559.8 million, or 104.0%, to $1.098 billion for the three months ended March 31, 2024, from $538.4 million for the three months ended March 31, 2023, which reflected strong organic loan demand, as well as the MBF merger. Investment securities averaged $389.7 million for the three months ended March 31, 2024, an increase of $44.4 million, or 12.9%, compared to $345.3 million for the three months ended March 31, 2023, which contributed $655,000 to tax-equivalent interest income. The tax-equivalent yield on earning assets increased 192 basis points to 5.43% for the three months ended March 31, 2024, from 3.51% for the same period in 2023, which resulted in a corresponding increase in tax-equivalent interest income of $5.2 million. The Corporation’s tax-equivalent yield on loans increased 180 basis points to 6.48% for the three months ended March 31, 2024, compared to 4.68% in 2023, resulting in a corresponding increase in tax-equivalent interest income of $4.8 million, due primarily to net accretion of loan fair value adjustments recorded in conjunction with the MBF merger as well as the continued repricing of existing loans in the Corporation’s portfolio. The tax-equivalent yield on investment securities increased 81 basis points to 2.48% for the three months ended March 31, 2024, from 1.67% for the three months ended March 31, 2023, and caused a corresponding increase to tax-equivalent interest income of $186,000.

 

Interest expense increased $5.5 million, or 229.6%, to $8.0 million for the three months ended March 31, 2024, from $2.4 million for the three months ended March 31, 2023, which was primarily related to increases in average interest-bearing liabilities resulting from the MBF merger as well as an increase in funding costs. The Corporation was more reliant on wholesale funding for the three months ended March 31, 2024. As a result, average borrowed funds, which is largely comprised of customer repurchase agreements and FHLB of Pittsburgh advances, averaged $272.5 million for the three months ended March 31, 2024, an increase of $91.1 million from $181.4 million for the three months ended March 31, 2023. Higher volumes of average borrowed funds resulted in a corresponding increase in interest expense of $1.1 million. Total average interest-bearing deposits increased $396.7 million, or 79.0%, to $898.8 million for the three months ended March 31, 2024, compared to $502.1 million for the three months ended March 31, 2023, which resulted in a corresponding increase in interest expense of $907,000. In the latter half of 2022 and into 2023 and 2024, following the rapid rise in market interest rates, competition for deposits intensified and depositors became increasingly rate sensitive. The Corporation responded with increases in deposit rates. As a result, the Corporation experienced an increase in interest expense due to an increase in funding costs. For the three months ended March 31, 2024, the Corporation’s cost of funds increased 130 basis points to 2.73% from 1.43% for the three months ended March 31, 2023, which resulted in a corresponding increase in interest expense of $3.6 million.

 

The following Average Balance Sheet and Rate Analysis tables presents the average assets, actual income or expense and the average yield on assets, liabilities and stockholders’ equity for the three months ended March 31, 2024 and 2023.

 

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AVERAGE BALANCE SHEET AND RATE ANALYSIS

THREE MONTHS ENDED MARCH 31,

 

   2024   2023 
(In Thousands)  Average Balance   Interest   Average Rate   Average Balance   Interest   Average Rate 
ASSETS:   (1)             (1)          
Tax-exempt loans  $41,144   $439    4.29%  $30,848   $274    3.60%
All other loans   1,057,005    17,256    6.57%   507,527    5,934    4.74%
Total loans (2)(3)(4)   1,098,149    17,695    6.48%   538,375    6,208    4.68%
                               
Taxable securities   311,078    1,384    1.79%   330,898    1,275    1.54%
Tax-exempt securitites (3)   78,666    1,024    5.24%   14,427    163    4.52%
Total securities   389,744    2,408    2.48%   345,325    1,438    1.67%
                               
Federal funds sold   —    —    0.00%   5    —    0.00%
Interest-bearing deposits in other banks   5,106    66    5.20%   5,282    60    4.61%
                               
Total interest-earning assets   1,492,999    20,169    5.43%   888,987    7,706    3.51%
                               
Other assets   97,327              63,195           
                               
TOTAL ASSETS  $1,590,326             $952,182           
                               
LIABILITIES:                              
Savings  $203,003    16    0.03%  $169,236    13    0.03%
Now deposits   257,791    800    1.25%   155,357    16    0.04%
Money market deposits   104,095    485    1.87%   50,907    157    1.25%
Time deposits   333,875    3,309    3.99%   126,608    441    1.41%
Total interest-bearing deposits   898,764    4,610    2.06%   502,108    627    0.51%
                               
Short-term borrowings   202,653    2,497    4.96%   181,414    1,786    3.99%
Long-term borrowings   69,882    847    4.87%   24    —    0.00%
Total borrowings   272,535    3,344    4.93%   181,438    1,786    3.99%
                               
Total interest-bearing liabilities   1,171,299    7,954    2.73%   683,546    2,413    1.43%
                               
Demand deposits   254,129              176,403           
Other liabilities   10,585              4,343           
Stockholders’ equity   154,313              87,890           
                               
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $1,590,326             $952,182           
Interest rate spread (6)             2.70%             2.07%
Net interest income/margin (5)       $12,215    3.32%       $5,293    2.41%

 

(1)Average volume information was compared using daily averages for interest-earning and bearing accounts.
(2)Interest on loans includes loan fee income.

(3)Tax exempt interest revenue is shown on a tax-equivalent basis using a statutory federal income tax rate of 21 percent for 2024 and 2023.

(4)Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.

(5)Net interest margin is computed by dividing annualized tax-equivalent net interest income by total interest earning assets.

(6)Interest rate spread represents the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities.

 

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Reconcilement of Taxable Equivalent Net Interest Income

 
   For the Three Months Ended March 31, 
(In Thousands)  2024   2023 
         
Total interest income  $19,889   $7,614 
Total interest expense   7,954    2,413 
           
Net interest income   11,935    5,201 
Tax equivalent adjustment   280    92 
           
Net interest income          
(fully taxable equivalent)  $12,215   $5,293 

 

Rate/Volume Analysis

 

To enhance the understanding of the effects of volumes (the average balance of earning assets and costing liabilities) and average interest rate fluctuations on the Consolidated Balance Sheets as it pertains to net interest income, the table below reflects these changes for the three months ended March 31, 2024 versus the three months ended March 31, 2023:

 

   Three Months Ended March 31, 
   2024 vs 2023 
   Increase (Decrease) 
   Due to  
(In Thousands)  Volume   Rate    Net 
Interest income:               
Loans, tax-exempt  $92   $73   $165 
Loans   6,478    4,844    11,322 
Taxable investment securities   (76)   185    109 
Tax-exempt investment securities   722    139    861 
Federal funds sold   —    —    — 
Interest bearing deposits   (2)   8    6 
Total interest-earning assets   7,214    5,249    12,463 
                
Interest expense:               
Savings   3    —    3 
NOW deposits   11    773    784 
Money market deposits   165    163    328 
Time deposits   728    2,140    2,868 
Short-term borrowings   211    500    711 
Long-term borrowings, FHLB   847    —    847 
Total interest-bearing liabilities   1,965    3,576    5,541 
Change in net interest income  $5,249   $1,672   $6,922 

 

Provision (Credit) for Credit Losses - Loans

 

For the three months ended March 31, 2024, the Corporation recorded a $101,000 provision for credit losses on loans, compared to a $418,000 credit for the three months ended March 31, 2023. For the three months ended March 31, 2024, the provision for credit losses primarily reflects an increase in volume in the loan portfolio during the quarter. For the three months ended March 31, 2023, the credit was primarily related to the clarity that existed related to the COVID-19 pandemic and the related financial condition of municipalities and local businesses.

 

See Note 4 within the Corporation’s Notes to the Unaudited Consolidated Financial Statements which are included in this Quarterly Report on Form 10-Q for more information regarding the Corporation’s allowance for credit losses as of March 31, 2024.

 

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Non-interest Income

 

Total non-interest income increased $906,000 or 55.7% to $2.5 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Earnings on bank-owned life insurance increased $118,000 or 108.3% from $109,000 to $227,000 due to an increase in cash surrender values related to the MBF merger. Interchange fees increased $195,000 or 46.0% due to an increase in the volume of transactions due to the MBF merger and continued increase in electronic payments. Other non-interest income increased $389,000 or 129.2% due to incentives received in conjunction with the launch of a debit card reissuance project during the first quarter 2024 as well as a governmental grant recorded in the first quarter in conjunction with the completion of a solar energy project.

 

   For the Three Months Ended 
   March 31, 2024   March 31, 2023   Change 
(In Thousands)  Amount   % Total   Amount   % Total   Amount   % 
Service charges and fees  $615    24.3%  $525    32.3%  $90    17.1%
Gain on sale of loans   76    3.0    29    1.8    47    162.1 
Earnings on bank-owned life insurance   227    9.0    109    6.7    118    108.3 
Brokerage   224    8.8    128    7.9    96    75.0 
Trust   206    8.1    191    11.7    15    7.9 
Losses on marketable equity securities   (117)   (4.6)   (81)   (5.0)   (36)   44.4 
Realized losses on available-for-sale debt securities, net   (8)   (0.3)   —    —    (8)   100.0 
Interchange fees   619    24.4    424    26.1    195    46.0 
Other non-interest income   690    27.3    301    18.5    389    129.2 
Total non-interest income  $2,532    100.0%  $1,626    100.0%  $906    55.7%

 

Non-interest Expense

 

Total non-interest expense increased $4.8 million or 100.2% from $4.8 million for the three months ended March 31, 2023, to $9.6 million for the three months ended March 31, 2024. The MBF merger has contributed significantly to increases in all components of non-interest expense. Salaries and employee benefits increased $2.2 million, occupancy increased $295,000, furniture and equipment increased $377,000, professional fees increased $488,000, federal deposit insurance increased $112,000, automated teller machine and interchange increased $143,000 and other non-interest expense increased $454,000. All of these increases relate to the closing of the MBF merger on November 11, 2023. Merger-related expenses totaled $96,000 and amortization of core deposit intangible totaled $549,000 for the three months ended March 31, 2024.

 

One standard to measure non-interest expense is to express annualized non-interest expense as a percentage of average total assets. For the three months ended March 31, 2024 this percentage was 2.44% compared to 2.03% for the three months ended March 31, 2023.

 

   For the Three Months Ended 
   March 31, 2024   March 31, 2023   Change 
(In Thousands)  Amount   % Total   Amount   % Total   Amount   % 
Salaries and employee benefits  $4,802    49.7%  $2,592    53.8%  $2,210    85.3%
Occupancy   618    6.4    323    6.7    295    91.3 
Furniture and equipment   896    9.3    519    10.8    377    72.6 
Pennsylvania shares tax   210    2.2    161    3.3    49    30.4 
Professional fees   799    8.3    311    6.5    488    156.9 
Director’s fees   134    1.4    82    1.7    52    63.4 
Federal deposit insurance   220    2.3    108    2.2    112    103.7 
Telecommunications   88    0.9    84    1.7    4    4.8 
Automated teller machine and interchange   262    2.7    119    2.5    143    120.2 
Merger-related expenses   96    1.0    —    —    96    100.0 
Amortization of core deposit intangible   549    5.7    —    —    549    100.0 
Other non-interest expense   972    10.1    518    10.8    454    87.6 
Total non-interest expense  $9,646    100.0%  $4,817    100.0%  $4,829    100.2%

 

LIQUIDITY

 

The Bank’s liquidity, represented by cash and due from banks, is a product of its operating, investing and financing activities. The Bank’s primary sources of funds are deposits, securities sold under agreements to repurchase, principal repayments of securities and outstanding loans, funds provided from operations, and day-to-day FHLB – Pittsburgh borrowings. In addition, the Corporation invests excess funds in short-term interest-earning assets such as overnight deposits or U.S. agency securities, which provide liquidity to meet lending requirements. While scheduled payments from the amortization of loans and securities and short-term investments are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and repayments on loans and mortgage-backed securities.

 

36 

 

 

The Bank strives to maintain sufficient liquidity to fund operations, loan demand and to satisfy fluctuations in deposit levels. The Bank is required to have enough investments that qualify as liquid assets in order to maintain sufficient liquidity to ensure safe and sound banking operations. Liquidity may increase or decrease depending upon the availability of funds and comparative yields on investments in relation to the return on loans. The Bank attempts to maintain adequate but not excessive liquidity, and liquidity management is both a daily and long-term function of its business management. The Bank manages its liquidity in accordance with a board of directors-approved asset liability policy, which is administered by its asset-liability committee (“ALCO”). ALCO reports interest rate sensitivity, liquidity, capital and investment-related matters on a quarterly basis to the Corporation’s board of directors.

 

The Bank reviews cash flow projections regularly and updates them in order to maintain liquid assets at levels believed to meet the requirements of normal operations, including loan commitments and potential deposit outflows from maturing certificates of deposit and savings withdrawals. While deposits and securities sold under agreements to repurchase are its primary source of funds, when needed it is also able to generate cash through borrowings from the FHLB. At March 31, 2024, the Bank had remaining available capacity with FHLB, subject to certain collateral restrictions, of $368.2 million.

 

Liquidity management is required to ensure that adequate funds will be available to meet anticipated and unanticipated deposit withdrawals, debt service payments, investment commitments, commercial and consumer loan demand, and ongoing operating expenses. Funding sources include principal repayments on loans, sale of assets, growth in time and core deposits, short and long-term borrowings, investment securities coming due, loan prepayments and repurchase agreements. Regular loan payments are a dependable source of funds, while the sale of investment securities, deposit growth and loan prepayments are significantly influenced by general economic conditions and the level of interest rates.

 

We manage liquidity on a daily basis. We believe that our liquidity is sufficient to meet present and future financial obligations and commitments on a timely basis. However, see potential liquidity risk factors at Item 1A – Risk Factors of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023, and refer to the Consolidated Statements of Cash Flows in this Form 10-Q.

 

INTEREST RATE RISK MANAGEMENT

 

Interest rate risk management involves managing the extent to which interest-sensitive assets and interest-sensitive liabilities are matched. Interest rate sensitivity is the relationship between market interest rates and earnings volatility due to the repricing characteristics of assets and liabilities. The Bank’s net interest income is affected by changes in the level of market interest rates. In order to maintain consistent earnings performance, the Bank seeks to manage, to the extent possible, the repricing characteristics of its assets and liabilities.

 

One major objective of the Bank when managing the rate sensitivity of its assets and liabilities is to stabilize net interest income. The management of and authority to assume interest rate risk is the responsibility of the Bank’s ALCO, which is comprised of senior management and Board members. ALCO meets quarterly to monitor the ratio of interest sensitive assets to interest sensitive liabilities. The process to review interest rate risk management is a regular part of management of the Bank. Consistent policies and practices of measuring and reporting interest rate risk exposure, particularly regarding the treatment of noncontractual assets and liabilities, are in effect. In addition, there is an annual process to review the interest rate risk policy with the Board of Directors which includes limits on the impact to earnings from shifts in interest rates.

 

The ratio between assets and liabilities repricing in specific time intervals is referred to as an interest rate sensitivity gap. Interest rate sensitivity gaps can be managed to take advantage of the slope of the yield curve as well as forecasted changes in the level of interest rate changes.

 

To manage the interest sensitivity position, an asset/liability model called “gap analysis” is used to monitor the difference in the volume of the Bank’s interest sensitive assets and liabilities that mature or reprice within given periods. A positive gap (asset sensitive) indicates that more assets reprice during a given period compared to liabilities, while a negative gap (liability sensitive) has the opposite effect. The Bank employs computerized net interest income simulation modeling to assist in quantifying interest rate risk exposure. This process measures and quantifies the impact on net interest income through varying interest rate changes and balance sheet compositions. The use of this model assists the ALCO to gauge the effects of the interest rate changes on interest sensitive assets and liabilities in order to determine what impact these rate changes will have upon our net interest spread.

 

At March 31, 2024, our cumulative gap positions and the potential earnings change resulting from various change in rates were both within the internal risk management guidelines.

 

37 

 

 

In addition to gap analysis, the Bank uses earnings simulation to assist in measuring and controlling interest rate risk. The Bank also simulates the impact on net interest income of plus and minus 100, 200, 300 and 400 basis point rate shocks. The results of these theoretical rate shocks provide an additional tool to help manage the Bank’s interest rate risk.

 

It is our opinion that the asset/liability mix and the interest rate risk associated with the balance sheet is within manageable parameters. Additionally, the Bank’s Asset/Liability Committee meets quarterly with an investment consultant.

 

IMPACT OF INFLATION AND CHANGING PRICES

 

The preparation of financial statements in conformity with U.S. GAAP requires management to measure the Corporation’s financial position and operating results primarily in terms of historic dollars. Changes in the relative value of money due to inflation or recession are generally not considered. The primary effect of inflation on the Corporation’s operations is primarily related to increases in operating expenses. Management considers changes in interest rates to impact our financial condition and results of operations to a far greater degree than changes in prices due to inflation. Although interest rates are greatly influenced by changes in the inflation rate, they do not necessarily change at the same rate or in the same magnitude as the inflation rate. The Corporation manages interest rate risk in several ways. There can be no assurance that the Corporation will not be materially adversely affected by future changes in interest rates, as interest rates are highly sensitive to many factors that are beyond its control. Additionally, inflation may adversely impact the financial condition of the Corporation’s borrowers and could impact their ability to repay their loans, which could negatively affect the Corporation’s asset quality through higher delinquency rates and increased charge-offs. Management will carefully consider the impact of inflation and rising interest rates on the Corporation’s borrowers in managing credit risk related to the loan portfolio.

 

Item 3. Quantitative and Qualitative Disclosure About Market Risk

 

The information called for by this item can be found at Part I Item 2 of this Report on Form 10-Q under the caption “Interest Rate Risk Management” and is incorporated in its entirety by reference under this Item 3.

 

Item 4. Controls and Procedures

 

Our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) have concluded that our disclosure controls and procedures (as defined in Rules 13a – 15(e) and 15d – 15(e) under the Securities Exchange Act of 1934, as amended), based on their evaluation of these controls and procedures as of the end of the period covered by this Report, were effective as of such date at the reasonable assurance level as discussed below to ensure that information required to be disclosed by us in the reports we file under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Our management, including the CEO and CFO, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. In addition, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls.

 

The CEO and CFO have evaluated the changes to our internal controls over financial reporting that occurred during our fiscal Quarter Ended March 31, 2024, as required by paragraph (d) of Rules 13a – 15 and 15d – 15 under the Securities Exchange Act of 1934, as amended, and have concluded that there were no changes that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

PART II Other Information

 

Item 1. Legal Proceedings

 

At March 31, 2024, the Corporation was not involved in any legal proceedings, other than routine legal proceedings in the ordinary course of business, which involve amounts which, in the aggregate, are believed by management to be immaterial to the financial condition of the Corporation. In addition, no material proceedings are pending or are known to be threatened or contemplated against the Corporation by government authorities.

 

38 

 

 

Item 1A. Risk Factors

 

There have been no material changes from the risk factors previously disclosed in Item 1A of the Corporation’s Form 10-K filed March 12, 2024.

 

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

 

(a)None

 

(b)Not applicable

 

(c)Effective May 10, 2016, the Corporation amended its treasury stock repurchase program. Under the amended program, the Corporation was authorized to repurchase up to 200,000 shares of the Corporation’s common stock. During the first quarter 2024, the Corporation did not repurchase any shares of its common stock.

 

Item 3. Defaults Upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable

 

Item 5. Other Information

 

(a)None

 

(b)None

 

(c)During the three months ended March 31, 2024, no director or officer of the Corporation adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408(a) of Regulation S-K.

 

Item 6. Exhibits

 

3.1 Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (filed on November 16, 2023))

 

3.2 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to Registrant’s Registration Statement on Form S-4 (File No. 333-273023 filed on June 29, 2023))

 

4.1 Form of Common Stock Certificate

 

31.1 Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer

 

31.2 Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer

 

32.1 Section 1350 Certification of Chief Executive Officer

 

32.2 Section 1350 Certification of Chief Financial Officer

 

101 The following materials from the Corporation’s Quarterly Report on Form 10-Q for the period ended March 31, 2024, formatted in XBRL (Extensible Business Reporting Language); (i) the Consolidated Balance Sheets (unaudited), (ii) the Consolidated Statements of Income (unaudited), (iii) the Consolidated Statements of Comprehensive Income (unaudited), (iv) the Consolidated Statements of Changes in Stockholders’ Equity (unaudited), (v) the Consolidated Statements of Cash Flows (unaudited), and (vi) the Notes to Unaudited Consolidated Financial Statements.

 

104 Cover Page for Interactive Data File (embedded with the Inline XBRL document)

 

39 

 

 

SIGNATURES

 

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

 

Muncy Columbia Financial Corporation

(Registrant)

 

By: /s/ Lance O. Diehl Date: May 13, 2024
 

Lance O. Diehl

President and Chief Executive Officer
(Principal Executive Officer)

  
     
By: /s/ Joseph K. O’Neill, Jr. Date: May 13, 2024
 

Joseph K. O’Neill, Jr.

Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

  
     

 

40 

 

 

Muncy Columbia Financial Corporation 10-Q

 

Exhibit 4.1

 

Muncy columbia financial corporation Incorporated under the laws of the Commonwealth of Pennsylvania This Certifies that CUSIP # 124880105 NUMBER SHARES is the registered holder of Shares COMMON STOCK - Par Value $1.25 Per Share transferable only on the books of the Corporation by the holder hereof in person or by Attorney upon surrender of this Certificate properly endorsed. Witness the facsimile seal of the Corporation and signatures of its duly authorized officers. Dated: COUNTER SIGNED AND REGISTERED AMERICAN STOCK TRANSFER & TRUST COMPANY TRANSFER AGENT AND REGISTRAR BY AUTHORIZED SIGNATURE Chairman, President and Chief Executive Officer Senior Executive Vice President and Chief Operating Officer

 

 

 

 

The Corporation will furnish without charge to each stockholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional, or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM-as tenants in common UNIF GIFT MIN ACT- Custodian. (Cust) (Minor) TEN ENT-as tenants by the entireties under Uniform Gifts to Minors Act (State) JT TEN -as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. For value received hereby sell assign and hansferunto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) shares of the Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint Altorney 10 transfer the said shares on the books of the within named Corporation with full power of substitution in the premises. Dated NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER

 

 

 

Muncy Columbia Financial Corporation 10-Q

 

EXHIBIT 31.1

 

 

MUNCY COLUMBIA FINANCIAL CORPORATION

 

CERTIFICATION PURSUANT TO

RULE 13a – 14(a) UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS AMENDED

 

 

I, Lance O. Diehl, certify that:

 

1.I have reviewed this quarterly report on Form 10-Q of Muncy Columbia Financial Corporation;

 

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 quarterly 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 officers 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 and 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 officers 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: May 13, 2024

 

/s/ Lance O. Diehl 
 Lance O. Diehl  
 President and Chief Executive Officer  
 (Principal Executive Officer)  

 

41 

 

Muncy Columbia Financial Corporation 10-Q

 

EXHIBIT 31.2

 

 

MUNCY COLUMBIA FINANCIAL CORPORATION

 

CERTIFICATION PURSUANT TO

RULE 13a – 14(a) UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS AMENDED

 

 

I, Joseph K. O’Neill, Jr., certify that:

 

1.I have reviewed this quarterly report on Form 10-Q of Muncy Columbia Financial Corporation;

 

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 officers 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:

 

(e)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;

 

(f)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.

 

(g)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report and 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

 

(h)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 officers 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: May 13. 2024

 

/s/ Joseph K. O’Neill, Jr. 
 Joseph K. O’Neill, Jr., CPA  
 Executive Vice President and Chief Financial Officer  
 (Principal Financial Officer)  

 

42 

 

Muncy Columbia Financial Corporation 10-Q

 

EXHIBIT 32.1

 

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with this Quarterly Report of Muncy Columbia Financial Corporation (the “Company”) on Form 10-Q for the period ending March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lance O. Diehl, President and Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to 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 this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Lance O. Diehl 
 Lance O. Diehl  
 President and Chief Executive Officer  
 (Principal Executive Officer)  

May 13, 2024

 

The forgoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the report or as a separate disclosure document.

 

A signed original of this written statement required by Section 906 has been provided to Muncy Columbia Financial Corporation and will be retained by Muncy Columbia Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

 

43 

 

Muncy Columbia Financial Corporation 10-Q

 

EXHIBIT 32.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with this Quarterly Report of Muncy Columbia Financial Corporation (the “Company”) on Form 10-Q for the period ending March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph K. O’Neill, Jr., Executive Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to 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 this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Joseph K. O’Neill, Jr. 
 Joseph K. O’Neill, Jr., CPA  
 Executive Vice President and Chief Financial Officer  
 (Principal Financial Officer)  

May 13, 2024

 

The forgoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the report or as a separate disclosure document.

 

A signed original of this written statement required by Section 906 has been provided to Muncy Columbia Financial Corporation and will be retained by Muncy Columbia Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

 

44 

v3.24.1.1.u2
Cover - shares
 3 Months Ended
Mar. 31, 2024
May 13, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2024  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 000-19028  
Entity Registrant Name MUNCY COLUMBIA FINANCIAL CORPORATION  
Entity Central Index Key 0000731122  
Entity Tax Identification Number 23-2254643  
Entity Incorporation, State or Country Code PA  
Entity Address, Address Line One 232 East Street  
Entity Address, City or Town Bloomsburg  
Entity Address, State or Province PA  
Entity Address, Postal Zip Code 17815  
City Area Code (570)  
Local Phone Number 784-4400  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   3,572,288
v3.24.1.1.u2
Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
ASSETS    
Cash and due from banks $ 11,994 $ 14,614
Interest-bearing deposits in other banks 4,237 3,763
Total cash and cash equivalents 16,231 18,377
Interest-bearing time deposits 736 979
Available-for-sale debt securities, at fair value 339,594 413,302
Marketable equity securities, at fair value 1,178 1,295
Restricted investment in bank stocks, at cost 8,013 10,394
Loans held for sale 614 366
Loans receivable 1,080,747 1,068,429
Allowance for credit losses (9,351) (9,302)
 Loans, net 1,071,396 1,059,127
Premises and equipment, net 27,322 27,569
Foreclosed assets held for sale 335 170
Accrued interest receivable 4,849 5,362
Bank-owned life insurance 40,456 40,209
Investment in limited partnerships 5,641 5,828
Deferred tax asset, net 11,745 12,634
Goodwill 25,609 25,609
Core deposit intangible, net 11,346 11,895
Other assets 8,206 6,663
TOTAL ASSETS 1,573,271 1,639,779
LIABILITIES    
Interest-bearing deposits 949,546 884,654
Noninterest-bearing deposits 263,954 266,015
Total deposits 1,213,500 1,150,669
Short-term borrowings 125,913 252,532
Long-term borrowings 65,524 70,448
Accrued interest payable 2,281 2,358
Other liabilities 11,190 9,947
TOTAL LIABILITIES 1,418,408 1,485,954
STOCKHOLDERS’ EQUITY    
Common stock, par value $1.25 per share; 15,000,000 shares authorized; issued 3,836,988 and outstanding 3,572,288 at March 31, 2024; issued 3,834,976 and outstanding 3,570,276 at December 31, 2023; 4,796 4,794
Additional paid-in capital 83,403 83,343
Retained earnings 92,980 90,514
Accumulated other comprehensive loss (16,526) (15,036)
Treasury stock, at cost; 264,700 shares at March 31, 2024 and December 31, 2023 (9,790) (9,790)
TOTAL STOCKHOLDERS’ EQUITY 154,863 153,825
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,573,271 $ 1,639,779
v3.24.1.1.u2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Mar. 31, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Common stock, par value (in dollars per share) $ 1.25 $ 1.25
Common stock, shares authorized 15,000,000 15,000,000
Common stock, shares issued 3,836,988 3,834,976
Common stock, shares, outstanding 3,572,288 3,570,276
Treasury stock, shares 264,700 264,700
v3.24.1.1.u2
Consolidated Statements of Income (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Interest and fees on loans:    
Taxable $ 17,256 $ 5,934
Tax-exempt 353 216
Interest and dividends on investment securities:    
Taxable 1,161 1,208
Tax-exempt 830 129
Dividend and other interest income 223 67
Deposits in other banks 66 60
TOTAL INTEREST AND DIVIDEND INCOME 19,889 7,614
INTEREST EXPENSE    
Deposits 4,610 627
Short-term borrowings 2,497 1,786
Long-term borrowings 847
TOTAL INTEREST EXPENSE 7,954 2,413
NET INTEREST INCOME 11,935 5,201
Provision (credit) for credit losses - loans 101 (418)
(Credit) provision for credit losses - off balance sheet credit exposures (11) 9
TOTAL PROVISION (CREDIT) FOR CREDIT LOSSES 90 (409)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR CREDIT LOSSES 11,845 5,610
NON-INTEREST INCOME    
Service charges and fees 615 525
Gain on sale of loans 76 29
Earnings on bank-owned life insurance 227 109
Brokerage fees 224 128
Trust fees 206 191
Losses on marketable equity securities (117) (81)
Realized losses on available-for-sale debt securities, net (8)
Interchange fees 619 424
Other non-interest income 690 301
TOTAL NON-INTEREST INCOME 2,532 1,626
NON-INTEREST EXPENSE    
Salaries and employee benefits 4,802 2,592
Occupancy 618 323
Furniture and equipment 896 519
Pennsylvania shares tax 210 161
Professional fees 799 311
Director’s fees 134 82
Federal deposit insurance 220 108
Telecommunications 88 84
Automated teller machine and interchange 262 119
Merger-related expenses 96
Amortization of core deposit intangible 549
Other non-interest expense 972 518
TOTAL NON-INTEREST EXPENSE 9,646 4,817
INCOME BEFORE INCOME TAX PROVISION 4,731 2,419
INCOME TAX PROVISION 695 479
NET INCOME $ 4,036 $ 1,940
EARNINGS PER SHARE - BASIC $ 1.13 $ 0.93
EARNINGS PER SHARE - DILUTED $ 1.13 $ 0.93
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 3,570,342 2,079,135
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 3,570,342 2,079,135
v3.24.1.1.u2
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Statement [Abstract]    
Net Income $ 4,036 $ 1,940
Other comprehensive (loss) income:    
Unrealized holding (losses) gains on available-for-sale debt securities (1,893) 6,354
Tax effect 397 (1,335)
Net realized loss included in net income 8
Tax effect (2)
Other comprehensive (loss) income, net (1,490) 5,019
Comprehensive income $ 2,546 $ 6,959
v3.24.1.1.u2
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Treasury Stock, Common [Member]
Total
Beginning balance, value at Dec. 31, 2022 $ 2,930 $ 30,030 $ 90,156 $ (27,384) $ (9,790) $ 85,942
Balance at beginning (in shares) at Dec. 31, 2022 2,343,835          
Net income 1,940 1,940
Other comprehensive income (loss) 5,019 5,019
Common stock issuance under employee stock purchase plan 20 20
Common stock issuance under employee stock purchase plan (in shares) 514          
Recognition of employee stock purchase plan expense 2 2
Cash dividends (874) (874)
Cumulative effect of adoption of ASU 2016-13 528 528
Ending balance, value at Mar. 31, 2023 $ 2,930 30,052 91,750 (22,365) (9,790) 92,577
Balance at ending (in shares) at Mar. 31, 2023 2,344,349          
Beginning balance, value at Dec. 31, 2023 $ 4,794 83,343 90,514 (15,036) (9,790) 153,825
Balance at beginning (in shares) at Dec. 31, 2023 3,834,976          
Net income 4,036 4,036
Other comprehensive income (loss) (1,490) (1,490)
Common stock issuance under employee stock purchase plan $ 2 54 56
Common stock issuance under employee stock purchase plan (in shares) 2,012          
Recognition of employee stock purchase plan expense 6 6
Cash dividends (1,570) (1,570)
Ending balance, value at Mar. 31, 2024 $ 4,796 $ 83,403 $ 92,980 $ (16,526) $ (9,790) $ 154,863
Balance at ending (in shares) at Mar. 31, 2024 3,836,988          
v3.24.1.1.u2
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Statement of Stockholders' Equity [Abstract]    
Cash dividends (in dollars per share) $ 0.44 $ 0.42
v3.24.1.1.u2
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
OPERATING ACTIVITIES    
Net Income $ 4,036 $ 1,940
Adjustments to reconcile net income to net cash provided by operating activities:    
Provision (credit) for credit losses 90 (409)
Depreciation and amortization of premises and equipment 370 165
Accretion of loans, net (2,789)
Amortization of deposits, net 481
Losses on marketable equity securities 117 81
Realized losses on available-for-sale debt securities, net 8
(Accretion) amortization of investment securities, net (184) 141
Deferred income taxes 1,284 107
Gain on sale of loans (76) (29)
Proceeds from sale of mortgage loans 2,257 2,929
Originations of mortgage loans held for resale (2,429) (1,157)
Amortization of core deposit intangibles 549
Amortization of investment in limited partnerships 187 53
Decrease (increase) in accrued interest receivable 513 (152)
Earnings on bank-owned life insurance (227) (109)
(Decrease) increase in accrued interest payable (77) 115
Other, net (232) 197
Net cash provided by operating activities 3,878 3,872
Available-for-sale debt securities:    
Purchases (789)
Proceeds from sales 50,311
Proceeds from paydowns, calls and maturities 21,688 3,904
Proceeds from maturities of interest-bearing time deposits 248
Purchase of bank-owned life insurance (20) (20)
Proceeds from redemption of restricted investment in bank stocks 4,232 758
Purchase of restricted investment in bank stocks (1,851) (1,002)
Net increase in loans (9,735) (11,491)
Purchase of investment in limited partnership (1,394)
Acquisition of premises and equipment (113) (79)
Net cash provided by (used for) investing activities 64,760 (10,113)
FINANCING ACTIVITIES    
Net increase (decrease) in deposits 62,350 (6,949)
Net (decrease) increase in short-term borrowings (126,619) 11,155
Repayment of long-term borrowings (5,001) (1)
Proceeds from issuance of common stock 56 20
Cash dividends paid (1,570) (874)
Net cash (used for) provided by financing activities (70,784) 3,351
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,146) (2,890)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 18,377 13,084
CASH AND CASH EQUIVALENTS, END OF PERIOD 16,231 10,194
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION    
Interest paid 8,031 2,298
Loans transferred to foreclosed assets held for sale $ 165
v3.24.1.1.u2
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Pay vs Performance Disclosure [Table]    
Net Income (Loss) $ 4,036 $ 1,940
v3.24.1.1.u2
Insider Trading Arrangements
 3 Months Ended
Mar. 31, 2024
Trading Arrangements, by Individual [Table]  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.1.1.u2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the accounts of Muncy Columbia Financial Corporation (the “Corporation”) and its wholly-owned subsidiary, Journey Bank (the “Bank”). All significant inter-company balances and transactions have been eliminated in consolidation.

 

BASIS OF PRESENTATION

 

The consolidated financial information included herein, except the consolidated balance sheet dated December 31, 2023, is unaudited. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included. Prior period amounts have been reclassified when necessary to conform to the current period’s presentation. Such reclassifications did not have an impact on the operating results or financial position of the Corporation. Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results for the year ending December 31, 2024.

 

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation’s audited financial statements, included in the Annual Report filed on Form 10-K as of and for the year ended December 31, 2023.

 

RECENTLY ISSUED BY NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS

 

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. ASU No. 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024. The ASU may be adopted on a prospective or retrospective basis and early adoption is permitted. The Corporation is currently evaluating the impact the new guidance will have on related disclosures related to income taxes.
v3.24.1.1.u2
BUSINESS COMBINATION
 3 Months Ended
Mar. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
BUSINESS COMBINATION

2. BUSINESS COMBINATION

 

On November 11, 2023, the Corporation completed its merger with Muncy Bank Financial, Inc. (“MBF”). MBF was a Pennsylvania corporation that conducted its business primarily through its wholly owned subsidiary The Muncy Bank & Trust Company, which operated from a main office in Muncy, Pennsylvania, and had nine additional branches throughout Northcentral Pennsylvania. The MBF merger has contributed significantly to growth in the size of the Corporation’s balance sheet and in net interest income and non-interest expenses.

 

In connection with the transaction, the Corporation recorded goodwill of $17.7 million and a core deposit intangible asset of $12.1 million. Assets acquired included gross loans valued at $504.1 million, available-for-sale debt securities valued at $93.0 million, bank-owned life insurance valued at $17.8 million and premises and equipment, net, valued at $14.9 million. Liabilities assumed included deposits valued at $521.3 million and borrowings valued at $105.5 million. The assets acquired and liabilities assumed in the merger were recorded at their estimated fair values at the time of closing, subject to refinement for up to one year after the closing date. There were no adjustments to the fair value measurements of assets acquired or liabilities assumed in the first quarter 2024.
v3.24.1.1.u2
SECURITIES
 3 Months Ended
Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
SECURITIES

3. SECURITIES

 

The amortized cost, related estimated fair value, and unrealized gains and losses of available-for-sale debt securities were as follows at March 31, 2024 and December 31, 2023:

 

   March 31, 2024 
       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
(In Thousands)  Cost   Gains   Losses   Value 
Obligation of U.S. Government Corporations and Agencies:                    
Mortgage-backed  $126,286   $115   $(15,807)  $110,594 
Collateralized mortgage obligations   7,698    351    —    8,049 
Other   145,000    —    (8,571)   136,429 
Obligations of state and political subdivisions   81,261    3,145    (159)   84,247 
Other debt securites   268    7    —    275 
Total available-for-sale debt securities  $360,513   $3,618   $(24,537)  $339,594 

 

   December 31, 2023 
       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
(In Thousands)  Cost   Gains   Losses   Value 
Obligation of U.S.Government Corporations and Agencies:                    
Mortgage-backed  $145,196   $1,158   $(15,014)  $131,340 
Collateralized mortgage obligations   8,515    503    —    9,018 
Other   197,325    —    (9,613)   187,712 
Obligations of state and political subdivisions   81,033    4,032    (109)   84,956 
Other debt securites   267    9    —    276 
Total available-for-sale debt securities  $432,336   $5,702   $(24,736)  $413,302 

 

Securities available-for-sale with an aggregate fair value of $176,203,000 and $263,706,000 at March 31, 2024 and December 31, 2023, respectively, were pledged to secure public funds, trust funds, securities sold under agreements to repurchase and other balances as required by law.

 

The amortized cost and estimated fair value of investment securities, by expected maturity, are shown below at March 31, 2024. Expected maturities on debt securities will differ from contractual maturities, because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

   Amortized     
(In Thousands)  Cost   Fair Value 
Due in one year or less  $34,888   $33,710 
Due after one year to five years   117,204    109,777 
Due after five years to ten years   21,596    21,944 
Due after ten years   52,841    55,520 
Sub-total   226,529    220,951 
           
Mortgage-backed securities   126,286    110,594 
Collateralized mortgage obligations   7,698    8,049 
Total debt securities  $360,513   $339,594 

 

The Corporation’s mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of interest rates. In the table above, mortgage-backed securities and collateralized mortgage obligations are shown in one period.

 

  

Proceeds from the sale of investments in debt securities classified as available-for-sale for the three months ended March 31, 2024, were $50,311,000. Gross realized gains and losses for the three months ended March 31, 2024, were $595,000 and $603,000, respectively. There were no sales of investments in debt securities classified as available-for-sale during the quarter ended March 31, 2023.

 

The following summary shows the gross unrealized losses and fair value, aggregated by investment category of those individual securities for which an allowance for credit losses has not been recorded that have been in a continuous unrealized loss position for less than or more than 12 months as of March 31, 2024 and December 31, 2023:

 

   March 31, 2024 
   Less than Twelve Months   Twelve Months or Greater   Total 
       Gross       Gross       Gross 
   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
(In Thousands)  Value   Losses   Value   Losses   Value   Losses 
Obligations of U.S. Government Corporations and Agencies:                         
      Mortgage-backed  $212   $(4)  $108,228   $(15,803)  $108,440   $(15,807)
     Other   —    —    136,429    (8,571)   136,429    (8,571)
Obligations of state and political subdivisions   14,209    (142)   1,340    (17)   15,549    (159)
     Total  $14,421   $(146)  $245,997   $(24,391)  $260,418   $(24,537)

 

   December 31, 2023 
   Less than Twelve Months   Twelve Months or Greater   Total 
       Gross       Gross       Gross 
   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
(In Thousands)  Value   Losses   Value   Losses   Value   Losses 
Obligations of U.S. Government Corporations and Agencies:                         
      Mortgage-backed  $47   $(1)  $112,884   $(15,013)  $112,931   $(15,014)
     Other   —    —    187,712    (9,613)   187,712    (9,613)
Obligations of state and political subdivisions   10,284    (90)   1,663    (19)   11,947    (109)
     Total  $10,331   $(91)  $302,259   $(24,645)  $312,590   $(24,736)

 

At March 31, 2024, the Corporation had a total of 48 debt securities that have been in a gross unrealized loss position for less than twelve months with depreciation of 1.0% from the Corporation’s amortized cost basis.

 

At March 31, 2024, the Corporation had a total of 122 debt securities that have been in a gross unrealized loss position for greater than twelve months with depreciation of 9.0% from the Corporation’s amortized cost basis.

 

At March 31, 2024, unrealized losses on debt securities have not been recognized into income because the issuers bonds are of high credit quality (rated BBB or higher), management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The fair value is expected to recover as the bonds approach maturity.

 

As of March 31, 2024 and December 31, 2023, no allowance for credit loss (“ACL”) was required for debt securities. The Bank does not have the intent to sell and does not believe it will be more likely than not to be required to sell any of these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.

 

As of March 31, 2024, all debt securities were rated above investment grade. Based on the payment status, rating and management’s evaluation of these securities, no ACL was required for the debt securities as of March 31, 2024. As of March 31, 2024, the underlying issuers continue to make timely principal and interest payments on the securities.

 

 

Equity securities with a readily determinable fair value are stated at fair value with realized and unrealized gains and losses reported in income. At March 31, 2024 and December 31, 2023, the Corporation had $1,178,000 and $1,295,000, respectively, in marketable equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on marketable equity securities during the three months ended March 31, 2024 and 2023:

 

   For the Three Months Ended  
   March 31, 
(In Thousands)  2024   2023 
Net losses recognized during the period on marketable equity securities  $(117)  $(81)
           
Less: Net gains and losses recognized during the period on marketable equity securities dold during the period   —    — 
           
Unrealized losses recognized during the period on marketable equity securities still held at the reporting date  $(117)  $(81)
v3.24.1.1.u2
LOANS AND ALLOWANCE FOR CREDIT LOSSES
 3 Months Ended
Mar. 31, 2024
Receivables [Abstract]  
LOANS AND ALLOWANCE FOR CREDIT LOSSES

4. LOANS AND ALLOWANCE FOR CREDIT LOSSES

 

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment to yield (interest income) over the life of the loan. Deferred fees and costs amounted to $809,000 at March 31, 2024 and $779,000 at December 31, 2023 and are netted against the outstanding unpaid principal balances.

 

The segments of the Corporation’s loan portfolio are disaggregated into classes that allow management to monitor risk and performance. The loan classes used are consistent with the internal reports evaluated by the Corporation’s management and Board of Directors to monitor risk and performance within the various segments of its loan portfolio.

Major classifications of loans at March 31, 2024 and December 31, 2023 consisted of:

 

(In Thousands)  March 31, 2024 
Commercial and industrial  $98,902 
Commercial real estate:     
   Commercial mortgages   327,987 
   Student housing   35,466 
Residential real estate:     
   Rental 1-4 family   56,125 
   1-4 family residential mortgages   537,855 
Consumer and other   24,412 
Gross loans  $1,080,747 

 

(In Thousands)  December 31, 2023 
Commercial and industrial  $94,278 
Commercial real estate:     
   Commercial mortgages   326,152 
   Student housing   33,650 
Residential real estate:     
   Rental 1-4 family   54,078 
   1-4 family residential mortgages   535,206 
Consumer and other   25,065 
Gross loans  $1,068,429 

 

Allowance for Credit Losses and Recorded Investment in Financial Receivables

 

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Corporation has aligned our segmentation to internal loan reports. The Corporation has identified the following portfolio segments: 

 

●Commercial and Industrial
●Commercial Real Estate
●Residential Real Estate
●Consumer and other

 

 

The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2024 and 2023:

 

                         
   For the Three Months Ended March 31, 2024 
       Commercial   Residential             
   Commercial and   Real   Real   Consumer         
(In Thousands)  Industrial   Estate   Estate   and Other   Unallocated   Total 
Balance, December 31, 2023  $801   $6,847   $1,474   $180   $—   $9,302 
(Credit) provision charged to operations   (90)   319    (368)   240    —    101 
Loans charged off   —    —    (45)   (11)   —    (56)
Recoveries   1    —    1    2    —    4 
Balance, March 31, 2024  $712   $7,166   $1,062   $411   $—   $9,351 

 

                         
   For the Three Months Ended March 31, 2023 
       Commercial   Residential             
   Commercial and   Real   Real   Consumer         
(In Thousands)  Industrial   Estate   Estate   and Other   Unallocated   Total 
Balance, December 31, 2022  $1,041   $2,897   $3,077   $60   $204   $7,279 
Impact of adopting ASC 326   (961)   3,205    (2,620)   (41)   (204)   (621)
(Credit) provision charged to operations   (117)   (391)   97    (7)   —    (418)
Loans charged off   —    —    (6)   —    —    (6)
Recoveries   49    1    4    —    —    54 
Balance, March 31, 2023  $12   $5,712   $552   $12   $—   $6,288 

 

The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Corporation’s historical loss experience. As of March 31, 2024, the Corporation expects that the market in which it operates will experience no significant change in economic conditions based primarily on housing indexes, interest rate stabilization, and a steady unemployment rate causing the trend in delinquencies over the next year to follow historical levels. Management adjusted the historical loss experience for these expectations. No reversion adjustments were necessary, as the starting point for the Corporation’s estimate was a cumulative loss rate covering the expected contractual term of the loan portfolio.

 

The Corporation recorded a $101,000 provision for credit losses for the three months ended March 31, 2024 as compared to a $418,000 credit for the quarter ended March 31, 2023. The 2024 provision for credit losses was primarily as a result of an increase in volume in the Corporation’s loan portfolio. The 2023 credit was a result of reduced commercial real estate past dues, reduced balances of commercial student housing real estate, and slightly improved economic forecasts.

 

Total non-performing assets amounted to $7,328,000 at March 31, 2024, as compared to $4,475,000 at December 31, 2023. For the three months ended March 31, 2024, the increase in non-performing assets was primarily attributable to one real estate loan relationship with an aggregate balance of $2,221,000 which was placed on nonaccrual status during the quarter. This relationship is well secured, and the Bank is working closely with the borrower to bring the relationship to a current status. The Bank does not expect to incur a credit loss related to this relationship at this time. Overall, non-performing loans remain well controlled at 0.65% of total gross loans at March 31, 2024 compared to 0.40% of total gross loans at December 31, 2023. The Corporation experienced net charge-offs of $52,000 for the three months ended March 31, 2024, as compared to net recoveries of $48,000 for the three months ended March 31, 2023. In summary, the allowance for credit losses on our loan portfolio provided 133.8% coverage of non-performing loans, and 0.87% of total loans, on March 31, 2024, compared to 216.0% coverage of non-performing loans, and 0.87% of total loans, on December 31, 2023.

 

Historical credit loss experience is the basis for the estimation of expected credit losses. The Corporation applies historical loss rates to pools of loans with similar risk characteristics. After consideration of the historic loss calculation, management can apply qualitative adjustments to reflect the current conditions and reasonable and supportive forecasts not already captured in the historical loss information at the balance sheet date.

 

In accordance with Accounting Standards Codification (“ASC”) 326, the Corporation will evaluate individual loans for expected credit losses when those loans do not share similar risk characteristics with loans evaluated using a collective (pooled) basis. In contrast to legacy accounting standards, this criterion is broader than the impairment concept and management may evaluate loans individually when no specific expectation of collectability is in place. Loans will not be included in both collective and individual analysis. The individual analysis will establish a specific reserve for loans in scope.

 

Specific reserves are established based on the following three acceptable methods for measuring the ACL:1) the present value of expected future cash flows discounted at the loan’s original interest rate; 2) the loan’s observable market price; 3) the fair value of the collateral when the loan is collateral dependent. The method is selected on a loan-by-loan basis with the evaluation of the need and amount of a specific allocation of the allowance being made on a quarterly basis.

 

 

The need for an updated appraisal on collateral dependent loans is determined on a case-by-case basis. The useful life of an appraisal or evaluation will vary depending upon the circumstances of the property and the economic conditions in the marketplace. A new appraisal is not required if there is an existing appraisal which, along with other information, is sufficient to determine a reasonable value for the property and to support an appropriate and adequate allowance for credit losses. At a minimum, annual documented reevaluation of the property is completed by the Bank’s Chief Credit Officer to support the value of the property.

 

When receiving an appraisal associated with an existing real estate collateral dependent transaction, the Bank’s Chief Credit Officer must determine if there have been material changes to the underlying assumptions in the appraisal which affect the original estimate of value. Some of the factors that could cause material changes to reported values include:

●the passage of time;
●the volatility of the local market;
●the availability of financing;
●natural disasters;
●the inventory of competing properties;
●new improvements to, or lack of maintenance of, the subject property or competing properties upon physical inspection by the Bank;
●changes in underlying economic and market assumptions, such as material changes in current and projected vacancy, absorption rates, capitalization rates, lease terms, rental rates, sales prices, concessions, construction overruns and delays, zoning changes, etc.; and/or
●environmental contamination.

 

The value of the property is adjusted to appropriately reflect the above listed factors and the value is discounted to reflect the value impact of a forced distressed sale, any outstanding senior liens, any outstanding unpaid real estate taxes, transfer taxes and closing costs that would occur with sale of the real estate. If the Chief Credit Officer determines that a reasonable value cannot be derived based on the available information, a new appraisal is ordered. The determination of the need for a new appraisal rests with the Chief Credit Officer and not the originating account officer.

 

The following table summarizes the loan portfolio and allowance for credit losses as of March 31, 2024 and December 31, 2023:

 

                     
   March 31, 2024 
       Commercial   Residential         
   Commercial and   Real   Real   Consumer     
(In Thousands)  Industrial   Estate   Estate   and Other   Total 
Loans:                         
Individually evaluated  $—   $12,169   $—   $—   $12,169 
Collectively evaluated   98,902    351,284    593,980    24,412    1,068,578 
Total loans  $98,902   $363,453   $593,980   $24,412   $1,080,747 
                          
Allowance for credit losses:                         
Individually evaluated  $—   $4,053   $—   $—   $4,053 
Collectively evaluated   712    3,113    1,062    411    5,298 
Total allowance for credit losses  $712   $7,166   $1,062   $411   $9,351 

 

                     
   December 31, 2023 
       Commercial   Residential         
   Commercial and   Real   Real   Consumer     
(In Thousands)  Industrial   Estate   Estate   and Other   Total 
Loans:                         
Individually evaluated  $—   $12,279   $—   $—   $12,279 
Collectively evaluated   94,278    347,523    589,284    25,065    1,056,150 
Total loans  $94,278   $359,802   $589,284   $25,065   $1,068,429 
                          
Allowance for credit losses:                         
Individually evaluated  $—   $4,143   $—   $—   $4,143 
Collectively evaluated   801    2,704    1,474    180    5,159 
Total allowance for credit losses  $801   $6,847   $1,474   $180   $9,302 

 

As of March 31, 2024 and December 31, 2023, there were no individually evaluated loans that were deemed to be collateral dependent.

 

 

Age Analysis of Past-Due Loans Receivable

 

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past-due status as of March 31, 2024 and December 31, 2023:

 

                         
   March 31, 2024 
       30-59   60-89             
       Days   Days   90+ Days   Total   Total 
(In Thousands)  Current   Past Due   Past Due   Past Due   Past Due   Loans 
Commercial and Industrial  $98,300   $449   $100   $53   $602   $98,902 
Commercial Real Estate   361,614    1,099    358    382    1,839    363,453 
Residential Real Estate   584,928    5,314    975    2,763    9,052    593,980 
Consumer and other   24,325    76    10    1    87    24,412 
   $1,069,167   $6,938   $1,443   $3,199   $11,580   $1,080,747 

 

   December 31, 2023 
       30-59   60-89             
       Days   Days   90+ Days   Total   Total 
(In Thousands)  Current   Past Due   Past Due   Past Due   Past Due   Loans 
Commercial and Industrial  $93,879   $129   $233   $37   $399   $94,278 
Commercial Real Estate   355,786    2,316    960    740    4,016    359,802 
Residential Real Estate   578,802    7,226    1,134    2,122    10,482    589,284 
Consumer and other   24,955    86    18    6    110    25,065 
   $1,053,422   $9,757   $2,345   $2,905   $15,007   $1,068,429 

 

Nonperforming Loans

 

The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of March 31, 2024 and December 31, 2023:

 

                     
   March 31, 2024 
   Nonaccrual   Nonaccrual       Loans Past     
   with no   with   Total   Due over 90 Days   Total 
(In Thousands)  ACL   ACL   Nonaccrual   Still Accruing   Nonperforming 
     Commercial and Industrial  $—   $209   $209   $—   $209 
     Commercial Real Estate   —    982    982    —    982 
     Residential Real Estate   —    5,661    5,661    115    5,776 
     Consumer and other   23    1    24    —    24 
         Total  $23   $6,853   $6,876   $115   $6,991 

 

   December 31, 2023 
   Nonaccrual   Nonaccrual       Loans Past     
   with no   with   Total   Due over 90 Days   Total 
(In Thousands)  ACL   ACL   Nonaccrual   Still Accruing   Nonperforming 
     Commercial and Industrial  $37   $16   $53   $—   $53 
     Commercial Real Estate   100    693    793    —    793 
     Residential Real Estate   —    3,151    3,151    294    3,445 
     Consumer and other   6    9    15    —    15 
         Total  $143   $3,869   $4,012   $294   $4,306 

 

 

Credit Quality Indicators

 

The Bank 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 Bank analyzes loans individually to classify the loans as to credit risk. This analysis includes non-homogeneous loans, such as commercial real estate, commercial construction, and commercial and industrial loans. This analysis is performed on a quarterly basis. The Bank uses the following definitions for risk ratings:

 

Pass. Loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

 

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

 

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have 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 existing facts, conditions, and values, highly questionable and improbable.

 

Based on the most recent analysis performed, the following table presents the recorded investment in non-homogenous loans by internal risk rating system as of March 31, 2024 and December 31, 2023:

 

                         
   March 31, 2024 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2024   2023   2022   2021   2020   Prior   Cost Basis   Total 
Commercial and Industrial                                        
Risk Rating                                        
Pass  $8,734   $11,909   $15,738   $15,331   $9,177   $19,180   $13,914   $93,983 
Special Mention   —    98    80    12    404    124    312    1,030 
Substandard   44    178    261    167    6    301    2,932    3,889 
Doubtful   —    —    —    —    —    —    —    — 
Total  $8,778   $12,185   $16,079   $15,510   $9,587   $19,605   $17,158   $98,902 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 
                                         
Commercial Real Estate                                        
Risk Rating                                        
Pass  $5,927   $62,623   $65,330   $66,332   $21,941   $119,494   $13,425   $355,072 
Special Mention   —    —    234    —    —    398    —    632 
Substandard   —    383    1,625    2,459    273    2,266    743    7,749 
Doubtful   —    —    —    —    —    —    —    — 
Total  $5,927   $63,006   $67,189   $68,791   $22,214   $122,158   $14,168   $363,453 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 
                                         
Total                                        
Risk Rating                                        
Pass  $14,661   $74,532   $81,068   $81,663   $31,118   $138,674   $27,339   $449,055 
Special Mention   —    98    314    12    404    522    312    1,662 
Substandard   44    561    1,886    2,626    279    2,567    3,675    11,638 
Doubtful   —    —    —    —    —    —    —    — 
Total  $14,705   $75,191   $83,268   $84,301   $31,801   $141,763   $31,326   $462,355 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 

 

 

                         
   December 31, 2023 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2023   2022   2021   2020   2019   Prior   Cost Basis   Total 
Commercial and Industrial                                        
Risk Rating                                        
Pass  $12,342   $16,357   $15,969   $9,681   $2,149   $18,068   $14,463   $89,029 
Special Mention   98    82    12    423    125    —    363    1,103 
Substandard   193    225    168    15    60    624    2,861    4,146 
Doubtful   —    —    —    —    —    —    —    — 
Total  $12,633   $16,664   $16,149   $10,119   $2,334   $18,692   $17,687   $94,278 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 
                                         
Commercial Real Estate                                        
Risk Rating                                        
Pass  $61,858   $65,974   $66,974   $23,184   $20,199   $100,528   $11,116   $349,833 
Special Mention   —    236    —    —    —    404    —    640 
Substandard   364    1,648    2,473    277    620    3,471    476    9,329 
Doubtful   —    —    —    —    —    —    —    — 
Total  $62,222   $67,858   $69,447   $23,461   $20,819   $104,403   $11,592   $359,802 
Current period gross charge-offs  $—   $—   $—   $—   $—   $70   $—   $70 
                                         
Total                                        
Risk Rating                                        
Pass  $74,200   $82,331   $82,943   $32,865   $22,348   $118,596   $25,579   $438,862 
Special Mention   98    318    12    423    125    404    363    1,743 
Substandard   557    1,873    2,641    292    680    4,095    3,337    13,475 
Doubtful   —    —    —    —    —    —    —    — 
Total  $74,855   $84,522   $85,596   $33,580   $23,153   $123,095   $29,279   $454,080 
Current period gross charge-offs  $—   $—   $—   $—   $—   $70   $—   $70 

 

 

The Bank monitors the credit risk profile by payment activity for residential real estate, consumer, and other loan classes. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. Nonperforming loans are reviewed quarterly. The following table presents the amortized cost in residential real estate, and consumer and other loans based on payment activity as of March 31, 2024 and December 31, 2023:

 

                         
   March 31, 2024 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2024   2023   2022   2021   2020   Prior   Cost Basis   Total 
Residential Real Estate                                        
Payment Performance                                        
Performing  $13,930   $86,934   $112,082   $84,053   $59,082   $171,039   $61,084   $588,204 
Nonperforming   —    269    978    1,631    454    1,567    877    5,776 
Total  $13,930   $87,203   $113,060   $85,684   $59,536   $172,606   $61,961   $593,980 
Current period gross charge-offs  $—   $—   $—   $—   $—   $45   $—   $45 
                                         
Consumer and Other                                        
Payment Performance                                        
Performing  $1,307   $5,081   $9,512   $1,950   $816   $1,417   $4,305   $24,388 
Nonperforming   —    —    8    2    —    —    14    24 
Total  $1,307   $5,081   $9,520   $1,952   $816   $1,417   $4,319   $24,412 
Current period gross charge-offs  $—   $7   $—   $—   $—   $4   $—   $11 
                                         
Total                                        
Payment Performance                                        
Performing  $15,237   $92,015   $121,594   $86,003   $59,898   $172,456   $65,389   $612,592 
Nonperforming   —    269    986    1,633    454    1,567    891    5,800 
Total  $15,237   $92,284   $122,580   $87,636   $60,352   $174,023   $66,280   $618,392 
Current period gross charge-offs  $—   $7   $—   $—   $—   $49   $—   $56 

 

 

   December 31, 2023 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2023   2022   2021   2020   2019   Prior   Cost Basis   Total 
Residential Real Estate                                        
Payment Performance                                        
Performing  $85,542   $111,413   $84,007   $57,696   $28,192   $141,952   $77,037   $585,839 
Nonperforming   275    92    536    455    443    1,644    —    3,445 
Total  $85,817   $111,505   $84,543   $58,151   $28,635   $143,596   $77,037   $589,284 
Current period gross charge-offs  $—   $—   $—   $—   $—   $79   $—   $79 
                                         
Consumer and Other                                        
Payment Performance                                        
Performing  $5,618   $10,145   $2,330   $990   $394   $1,193   $4,380   $25,050 
Nonperforming   5    8    1    —    —    1    —    15 
Total  $5,623   $10,153   $2,331   $990   $394   $1,194   $4,380   $25,065 
Current period gross charge-offs  $1   $17   $13   $—   $3   $13   $—   $47 
                                         
Total                                        
Payment Performance                                        
Performing  $91,160   $121,558   $86,337   $58,686   $28,586   $143,145   $81,417   $610,889 
Nonperforming   280    100    537    455    443    1,645    —    3,460 
Total  $91,440   $121,658   $86,874   $59,141   $29,029   $144,790   $81,417   $614,349 
Current period gross charge-offs  $1   $17   $13   $—   $3   $92   $—   $126 

 

 

Modifications to Borrowers Experiencing Financial Difficulty

 

Occasionally, the Bank modifies loans to borrowers in financial distress by providing term extension, other-than-significant payment delay or interest rate reduction. In some cases, the Bank provides multiple types of concessions on one loan. Typically, one type of concession, such as an interest rate reduction, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as term extension, may be granted.

 

For the three months ended March 31, 2024 and 2023, the Bank did not grant any loan modifications to borrowers experiencing financial difficulty.

 

As of March 31, 2024 and December 31, 2023, the Bank has not initiated formal proceedings on any loans that have not been transferred into foreclosed assets.

 

Concentrations of Credit Risk

 

Most of the Corporation’s lending activity occurs within the Bank’s primary market area which encompasses Clinton, Columbia, Lycoming, Montour and Eastern Northumberland counties in Northcentral Pennsylvania. The majority of the Corporation’s loan portfolio consists of commercial and consumer real estate loans. As of March 31, 2024 and December 31, 2023, there were no concentrations of loans related to any single industry in excess of 10% of total loans.
v3.24.1.1.u2
DEPOSITS
 3 Months Ended
Mar. 31, 2024
DEPOSITS

5. DEPOSITS

 

Major classifications of deposits at March 31, 2024 and December 31, 2023 consisted of:

 

(In Thousands)  March 31, 2024   December 31, 2023 
Demand deposits  $263,954   $266,015 
Interest-bearing demand deposits   298,122    251,953 
Savings   203,002    204,968 
Money market   112,190    103,602 
Time deposits   336,232    324,131 
Total deposits  $1,213,500   $1,150,669 

 

Time deposits of $250,000 or more amounted to $100,236,000 and $94,445,000 as of March 31, 2024 and December 31, 2023, respectively.
v3.24.1.1.u2
BORROWED FUNDS
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
BORROWED FUNDS

6. BORROWED FUNDS

 

Short-term borrowings include repurchase agreements with customers and advances from the FHLB. As of March 31, 2024, the Bank was approved by the FHLB for borrowings of up to $544,914,000 of which $70,420,000 was outstanding in the form of advances and the FHLB had issued letters of credit on the Bank’s behalf totaling $106,300,000 against its borrowing capacity. Advances from the FHLB are secured by qualifying assets of the Bank. In addition to the outstanding balances noted below, the Bank also has additional lines of credit totaling $19,030,000 available from correspondent banks other than the FHLB. The outstanding balances and related information for short-term borrowings are summarized as follows:

 

             
   March 31, 2024 
       Maximum   Weighted 
   Ending   Month End   Average Rate 
(In Thousands)  Balance   Balance   At Period End 
Securities sold under agreements to repurchase  $121,913   $185,380    4.75%
Other short-term borrowings   4,000    34,000    5.67%
Total  $125,913   $219,380    4.78%

 

 

             
   December 31, 2023 
       Maximum   Weighted 
   Ending   Month End   Average Rate 
(In Thousands)  Balance   Balance   At Period End 
Securities sold under agreements to repurchase  $189,532   $200,311    4.85%
Other short-term borrowings   63,000    63,000    5.68%
Total  $252,532   $263,311    5.10%

 

The Corporation utilizes securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents.

 

The remaining contractual maturity of repurchase agreements in the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 is presented in the following tables:

 

                          
   Remaining Contractual Maturity of the Agreements 
   Overnight  and           Greater than 90     
(In Thousands)  Continuous   Up to 30 Days   30-90 Days   Days   Total 
March 31, 2024                         
Securities sold under agreements to repurchase:                         
Obligation of U.S. Government Corporations and Agencies:                         
Mortgage-backed  $85,999   $—   $—   $—   $85,999 
Collateralized mortgage obligations   703    —    —    —    703 
Other   27,234    —    —    4,537    31,771 
Obligation of state and political subdivisions   3,440    —    —    —    3,440 
Total borrowings  $117,376   $—   $—   $4,537   $121,913 
                          
Gross amount of recognized liabilities for repurchase agreements       $121,913 
Amounts related to agreements not included in offsetting disclosure above       $— 

 

   Remaining Contractual Maturity of the Agreements 
   Overnight  and           Greater than 90     
(In Thousands)  Continuous   Up to 30 Days   30-90 Days   Days   Total 
December 31, 2023                         
Securities sold under agreements to repurchase:                         
Obligation of U.S. Government Corporations and Agencies:                         
Mortgage-backed  $93,137   $—   $—   $—   $93,137 
Other   92,151    1,663    1,094    1,487    96,395 
Total borrowings  $185,288   $1,663   $1,094   $1,487   $189,532 
                          
Gross amount of recognized liabilities for repurchase agreements       $189,532 
Amounts related to agreements not included in offsetting disclosure above       $— 

 

The fair value of securities pledged to secure repurchase agreements may decline. The Corporation manages this risk by having a policy to pledge securities valued at 110% of the gross outstanding balance of repurchase agreements. Securities sold under agreements to repurchase are secured by securities with a carrying amount of $139,482,000 and $219,227,000 at March 31, 2024 and December 31, 2023, respectively.

 

 

Long-Term Borrowings

 

Long-term FHLB borrowings consisted of the following at March 31, 2024 and December 31, 2023:

 

         
(In Thousands)  March 31, 2024   December 31, 2023 
Loans maturing in 2024 with a weighted-average rate of 4.98%  $10,208   $15,208 
Loans maturing in 2025 with a weighted-average rate of 4.79%   15,208    15,208 
Loans maturing in 2026 with a weighted-average rate of 4.05%   15,359    15,359 
Loans maturing in 2027 with a weighted-average rate of 3.93%   15,417    15,417 
Loans maturing in 2028 with a weighted-average rate of 3.85%   10,228    10,229 
Total long-term FHLB borrowings   66,420    71,421 
Unamortized fair value adjustments   (896)   (973)
Total long-term borrowings  $65,524   $70,448 

 

Note: Weighted-average rates are presented as of March 31, 2024.
v3.24.1.1.u2
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS
 3 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

7. FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

 

The Corporation establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. The standard describes three levels of inputs that may be used to measure fair values:

 

  Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

 

  Level II: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments of which can be directly observed.

 

  Level III: Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgement or estimation.

 

This hierarchy requires the use of observable market data available.

 

The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of March 31, 2024 and December 31, 2023, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

                 
   March 31, 2024 
(In Thousands)  Level I   Level II   Level  III   Total 
Obligation of US Government Corporations and Agencies                
     Mortgage-backed  $—   $110,594   $—   $110,594 
     Collateralized mortgage obligations   —    8,049    —    8,049 
     Other   —    136,429    —    136,429 
Obligations of state and political subdivisions   —    84,247    —    84,247 
Other debt securities   —    275    —    275 
Total available-for-sale debt securities  $—   $339,594   $—   $339,594 
                     
Marketable equity securities  $1,178   $—   $—   $1,178 
                     
Real estate loans held for sale  $—   $614   $—   $614 

 

 

                 
   December 31, 2023 
(In Thousands)  Level I   Level II   Level  III   Total 
Obligation of US Government Corporations and Agencies                
     Mortgage-backed  $—   $131,340   $—   $131,340 
     Collateralized mortgage obligations   —    9,018    —    9,018 
     Other   —    187,712    —    187,712 
Obligations of state and political subdivisions   —    84,956    —    84,956 
Other debt securities   —    276    —    276 
Total available-for-sale debt securities  $—   $413,302   $—   $413,302 
                     
Marketable equity securities  $1,295   $—   $—   $1,295 
                     
Real estate loans held for sale  $—   $366   $—   $366 

 

The fair values of equity securities classified as Level I are derived from quoted market prices in active markets; these assets consist entirely of stocks held in other banks. The fair values of all debt securities classified as Level II are obtained from nationally-recognized third-party pricing agencies. The fair values are derived primarily from cash flow models, which include assumptions for interest rates, credit losses, and prepayment speeds. The significant inputs utilized in the cash flow models are based on market data obtained from sources independent of the Corporation (observable inputs) and are therefore classified as Level II within the fair value hierarchy. The fair values of real estate loans held for sale classified as Level II are derived from observable pricing inputs for similar assets in active markets.

 

The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of March 31, 2024, and December 31, 2023, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

                 
   March 31, 2024 
(In Thousands)  Level I   Level II   Level  III   Total 
Assets Measured on a Non-recurring Basis:                    
Loans individually evaluated for credit loss  $—   $—   $8,116   $8,116 
   $—   $—   $8,116   $8,116 

 

   December 31, 2023 
(In Thousands)  Level I   Level II   Level  III   Total 
Assets Measured on a Non-recurring Basis:                    
Loans individually evaluated for credit loss  $—   $—   $8,136   $8,136 
   $—   $—   $8,136   $8,136 

 

The fair value of loans individually evaluated for credit loss are measured using a discounted cash flow approach.  Loans individually evaluated for credit loss are reviewed and evaluated on at least a quarterly basis for individual reserve requirements and adjusted accordingly. The following table provides a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques on a nonrecurring basis as of March 31, 2024 and December 31, 2023:

 

   March 31, 2024 
   Quantitative Information about Level III Fair Value Measurements 
(In Thousands)  Fair Value
Estimate		  

Valuation

Technique

 

Unobservable

Input

  Range   Weighted
Average		 
Loans individually evaluated for credit loss  $8,116   Discounted cash flows  Charge-off rates   0-100%    18.25%
                      

 

   December 31, 2023 
   Quantitative Information about Level III Fair Value Measurements 
(In Thousands)  Fair Value
Estimate		  

Valuation

Technique

 

Unobservable

Input

  Range   Weighted
Average		 
Loans individually evaluated for credit loss  $8,136   Discounted cash flows  Charge-off rates   0-100%    18.22%

 

 

 

 At March 31, 2024 and December 31, 2023, the carrying values and fair values of financial instruments that are not recorded at fair value in the consolidated financial statements are presented in the table below:

 

                          
   March 31, 2024
(In Thousands)  Carrying
Amount		   Fair Value   Level I   Level II   Level III 
Financial assets:                         
Cash and cash equivalents  $16,231   $16,231   $16,231   $—    $—  
Interest-bearing time deposits   736    737    —     737    —  
Restricted equity securities   8,013    8,013    —     8,013    —  
Loans, net   1,071,396    991,967    —     —     991,967 
Accrued interest receivable   4,849    4,849    —     4,849      
Mortgage servicing rights   1,961    2,080    —     —     2,080 
                          
Financial liabilities:                         
Interest-bearing deposits  $949,546   $948,001   $—    $613,314   $334,687 
Noninterest-bearing deposits   263,954    263,954    —     263,954    —  
Short-term borrowings   125,913    125,913    —     125,913    —  
Long-term borrowings   65,524    63,965    —     —     63,965 
Accrued interest payable   2,281    2,281    —     2,281    —  

 

   December 31, 2023
(In Thousands)  Carrying
Amount		   Fair Value   Level I   Level II   Level III 
Financial assets:                         
Cash and cash equivalents  $18,377   $18,377   $18,377   $—    $—  
Interest-bearing time deposits   979    982    —     982    —  
Restricted equity securities   10,394    10,394    —     10,394    —  
Loans, net   1,059,127    972,834    —     —     972,834 
Accrued interest receivable   5,362    5,362    —     5,362      
Mortgage servicing rights   2,035    2,107    —     —     2,107 
                          
Financial liabilities:                         
Interest-bearing deposits  $884,654   $883,434   $—    $560,521   $322,913 
Noninterest-bearing deposits   266,015    266,015    —     266,015    —  
Short-term borrowings   252,532    252,532    —     252,532    —  
Long-term borrowings   70,448    68,887    —     —     68,887 
Accrued interest payable   2,358    2,358    —     2,358    —  
                          

 

Fair value is defined as a financial instrument which could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. If a quoted market price is available for a financial instrument, the estimated fair value would be calculated based upon the market price per trading unit of the instrument, but focuses on the exit price of the asset and liability.

 

If no readily available market exists, the fair value estimates for financial instruments should be based upon management’s judgment regarding current economic conditions, interest rate risk, expected cash flows, future estimate losses, and other factors as determined through various option pricing formulas. As many of these assumptions result from judgments made by management based upon estimates that are inherently uncertain, the resulting estimated fair values may not be indicative of the amount realizable in the sale of a particular financial instrument. In addition, changes in assumptions on which the estimate fair values are based may have a significant impact on the resulting estimated fair values.
v3.24.1.1.u2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
PRINCIPLES OF CONSOLIDATION

PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the accounts of Muncy Columbia Financial Corporation (the “Corporation”) and its wholly-owned subsidiary, Journey Bank (the “Bank”). All significant inter-company balances and transactions have been eliminated in consolidation.
BASIS OF PRESENTATION

BASIS OF PRESENTATION

 

The consolidated financial information included herein, except the consolidated balance sheet dated December 31, 2023, is unaudited. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included. Prior period amounts have been reclassified when necessary to conform to the current period’s presentation. Such reclassifications did not have an impact on the operating results or financial position of the Corporation. Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results for the year ending December 31, 2024.

 

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation’s audited financial statements, included in the Annual Report filed on Form 10-K as of and for the year ended December 31, 2023.
RECENTLY ISSUED BY NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS

RECENTLY ISSUED BY NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS

 

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. ASU No. 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024. The ASU may be adopted on a prospective or retrospective basis and early adoption is permitted. The Corporation is currently evaluating the impact the new guidance will have on related disclosures related to income taxes.
v3.24.1.1.u2
SECURITIES (Tables)
 3 Months Ended
Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
The amortized cost, related estimated fair value, and unrealized gains and losses of available-for-sale debt securities were as follows at March 31, 2024 and December 31, 2023:

The amortized cost, related estimated fair value, and unrealized gains and losses of available-for-sale debt securities were as follows at March 31, 2024 and December 31, 2023:

 

   March 31, 2024 
       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
(In Thousands)  Cost   Gains   Losses   Value 
Obligation of U.S. Government Corporations and Agencies:                    
Mortgage-backed  $126,286   $115   $(15,807)  $110,594 
Collateralized mortgage obligations   7,698    351    —    8,049 
Other   145,000    —    (8,571)   136,429 
Obligations of state and political subdivisions   81,261    3,145    (159)   84,247 
Other debt securites   268    7    —    275 
Total available-for-sale debt securities  $360,513   $3,618   $(24,537)  $339,594 

 

   December 31, 2023 
       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
(In Thousands)  Cost   Gains   Losses   Value 
Obligation of U.S.Government Corporations and Agencies:                    
Mortgage-backed  $145,196   $1,158   $(15,014)  $131,340 
Collateralized mortgage obligations   8,515    503    —    9,018 
Other   197,325    —    (9,613)   187,712 
Obligations of state and political subdivisions   81,033    4,032    (109)   84,956 
Other debt securites   267    9    —    276 
Total available-for-sale debt securities  $432,336   $5,702   $(24,736)  $413,302 
The amortized cost and estimated fair value of investment securities, by expected maturity, are shown below at March 31, 2024.

The amortized cost and estimated fair value of investment securities, by expected maturity, are shown below at March 31, 2024. Expected maturities on debt securities will differ from contractual maturities, because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

   Amortized     
(In Thousands)  Cost   Fair Value 
Due in one year or less  $34,888   $33,710 
Due after one year to five years   117,204    109,777 
Due after five years to ten years   21,596    21,944 
Due after ten years   52,841    55,520 
Sub-total   226,529    220,951 
           
Mortgage-backed securities   126,286    110,594 
Collateralized mortgage obligations   7,698    8,049 
Total debt securities  $360,513   $339,594 
The following summary shows the gross unrealized losses and fair value, aggregated by investment category of those individual securities for which an allowance for credit losses has not been recorded that have been in a continuous unrealized loss position for less than or more than 12 months as of March 31, 2024 and December 31, 2023:

The following summary shows the gross unrealized losses and fair value, aggregated by investment category of those individual securities for which an allowance for credit losses has not been recorded that have been in a continuous unrealized loss position for less than or more than 12 months as of March 31, 2024 and December 31, 2023:

 

   March 31, 2024 
   Less than Twelve Months   Twelve Months or Greater   Total 
       Gross       Gross       Gross 
   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
(In Thousands)  Value   Losses   Value   Losses   Value   Losses 
Obligations of U.S. Government Corporations and Agencies:                         
      Mortgage-backed  $212   $(4)  $108,228   $(15,803)  $108,440   $(15,807)
     Other   —    —    136,429    (8,571)   136,429    (8,571)
Obligations of state and political subdivisions   14,209    (142)   1,340    (17)   15,549    (159)
     Total  $14,421   $(146)  $245,997   $(24,391)  $260,418   $(24,537)

 

   December 31, 2023 
   Less than Twelve Months   Twelve Months or Greater   Total 
       Gross       Gross       Gross 
   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
(In Thousands)  Value   Losses   Value   Losses   Value   Losses 
Obligations of U.S. Government Corporations and Agencies:                         
      Mortgage-backed  $47   $(1)  $112,884   $(15,013)  $112,931   $(15,014)
     Other   —    —    187,712    (9,613)   187,712    (9,613)
Obligations of state and political subdivisions   10,284    (90)   1,663    (19)   11,947    (109)
     Total  $10,331   $(91)  $302,259   $(24,645)  $312,590   $(24,736)
The following is a summary of unrealized and realized gains and losses recognized in net income on marketable equity securities during the three months ended March 31, 2024 and 2023:

Equity securities with a readily determinable fair value are stated at fair value with realized and unrealized gains and losses reported in income. At March 31, 2024 and December 31, 2023, the Corporation had $1,178,000 and $1,295,000, respectively, in marketable equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on marketable equity securities during the three months ended March 31, 2024 and 2023:

 

   For the Three Months Ended  
   March 31, 
(In Thousands)  2024   2023 
Net losses recognized during the period on marketable equity securities  $(117)  $(81)
           
Less: Net gains and losses recognized during the period on marketable equity securities dold during the period   —    — 
           
Unrealized losses recognized during the period on marketable equity securities still held at the reporting date  $(117)  $(81)
v3.24.1.1.u2
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables)
 3 Months Ended
Mar. 31, 2024
Receivables [Abstract]  
Major classifications of loans at March 31, 2024 and December 31, 2023 consisted of:

Major classifications of loans at March 31, 2024 and December 31, 2023 consisted of:

 

(In Thousands)  March 31, 2024 
Commercial and industrial  $98,902 
Commercial real estate:     
   Commercial mortgages   327,987 
   Student housing   35,466 
Residential real estate:     
   Rental 1-4 family   56,125 
   1-4 family residential mortgages   537,855 
Consumer and other   24,412 
Gross loans  $1,080,747 

 

(In Thousands)  December 31, 2023 
Commercial and industrial  $94,278 
Commercial real estate:     
   Commercial mortgages   326,152 
   Student housing   33,650 
Residential real estate:     
   Rental 1-4 family   54,078 
   1-4 family residential mortgages   535,206 
Consumer and other   25,065 
Gross loans  $1,068,429 
The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2024 and 2023:

The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2024 and 2023:

 

                         
   For the Three Months Ended March 31, 2024 
       Commercial   Residential             
   Commercial and   Real   Real   Consumer         
(In Thousands)  Industrial   Estate   Estate   and Other   Unallocated   Total 
Balance, December 31, 2023  $801   $6,847   $1,474   $180   $—   $9,302 
(Credit) provision charged to operations   (90)   319    (368)   240    —    101 
Loans charged off   —    —    (45)   (11)   —    (56)
Recoveries   1    —    1    2    —    4 
Balance, March 31, 2024  $712   $7,166   $1,062   $411   $—   $9,351 

 

                         
   For the Three Months Ended March 31, 2023 
       Commercial   Residential             
   Commercial and   Real   Real   Consumer         
(In Thousands)  Industrial   Estate   Estate   and Other   Unallocated   Total 
Balance, December 31, 2022  $1,041   $2,897   $3,077   $60   $204   $7,279 
Impact of adopting ASC 326   (961)   3,205    (2,620)   (41)   (204)   (621)
(Credit) provision charged to operations   (117)   (391)   97    (7)   —    (418)
Loans charged off   —    —    (6)   —    —    (6)
Recoveries   49    1    4    —    —    54 
Balance, March 31, 2023  $12   $5,712   $552   $12   $—   $6,288 
The following table summarizes the loan portfolio and allowance for credit losses as of March 31, 2024 and December 31, 2023:

The following table summarizes the loan portfolio and allowance for credit losses as of March 31, 2024 and December 31, 2023:

 

                     
   March 31, 2024 
       Commercial   Residential         
   Commercial and   Real   Real   Consumer     
(In Thousands)  Industrial   Estate   Estate   and Other   Total 
Loans:                         
Individually evaluated  $—   $12,169   $—   $—   $12,169 
Collectively evaluated   98,902    351,284    593,980    24,412    1,068,578 
Total loans  $98,902   $363,453   $593,980   $24,412   $1,080,747 
                          
Allowance for credit losses:                         
Individually evaluated  $—   $4,053   $—   $—   $4,053 
Collectively evaluated   712    3,113    1,062    411    5,298 
Total allowance for credit losses  $712   $7,166   $1,062   $411   $9,351 

 

                     
   December 31, 2023 
       Commercial   Residential         
   Commercial and   Real   Real   Consumer     
(In Thousands)  Industrial   Estate   Estate   and Other   Total 
Loans:                         
Individually evaluated  $—   $12,279   $—   $—   $12,279 
Collectively evaluated   94,278    347,523    589,284    25,065    1,056,150 
Total loans  $94,278   $359,802   $589,284   $25,065   $1,068,429 
                          
Allowance for credit losses:                         
Individually evaluated  $—   $4,143   $—   $—   $4,143 
Collectively evaluated   801    2,704    1,474    180    5,159 
Total allowance for credit losses  $801   $6,847   $1,474   $180   $9,302 
The following table presents the classes of the loan portfolio summarized by the past-due status as of March 31, 2024 and December 31, 2023:

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past-due status as of March 31, 2024 and December 31, 2023:

 

                         
   March 31, 2024 
       30-59   60-89             
       Days   Days   90+ Days   Total   Total 
(In Thousands)  Current   Past Due   Past Due   Past Due   Past Due   Loans 
Commercial and Industrial  $98,300   $449   $100   $53   $602   $98,902 
Commercial Real Estate   361,614    1,099    358    382    1,839    363,453 
Residential Real Estate   584,928    5,314    975    2,763    9,052    593,980 
Consumer and other   24,325    76    10    1    87    24,412 
   $1,069,167   $6,938   $1,443   $3,199   $11,580   $1,080,747 

 

   December 31, 2023 
       30-59   60-89             
       Days   Days   90+ Days   Total   Total 
(In Thousands)  Current   Past Due   Past Due   Past Due   Past Due   Loans 
Commercial and Industrial  $93,879   $129   $233   $37   $399   $94,278 
Commercial Real Estate   355,786    2,316    960    740    4,016    359,802 
Residential Real Estate   578,802    7,226    1,134    2,122    10,482    589,284 
Consumer and other   24,955    86    18    6    110    25,065 
   $1,053,422   $9,757   $2,345   $2,905   $15,007   $1,068,429 
The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of March 31, 2024 and December 31, 2023:

The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of March 31, 2024 and December 31, 2023:

 

                     
   March 31, 2024 
   Nonaccrual   Nonaccrual       Loans Past     
   with no   with   Total   Due over 90 Days   Total 
(In Thousands)  ACL   ACL   Nonaccrual   Still Accruing   Nonperforming 
     Commercial and Industrial  $—   $209   $209   $—   $209 
     Commercial Real Estate   —    982    982    —    982 
     Residential Real Estate   —    5,661    5,661    115    5,776 
     Consumer and other   23    1    24    —    24 
         Total  $23   $6,853   $6,876   $115   $6,991 

 

   December 31, 2023 
   Nonaccrual   Nonaccrual       Loans Past     
   with no   with   Total   Due over 90 Days   Total 
(In Thousands)  ACL   ACL   Nonaccrual   Still Accruing   Nonperforming 
     Commercial and Industrial  $37   $16   $53   $—   $53 
     Commercial Real Estate   100    693    793    —    793 
     Residential Real Estate   —    3,151    3,151    294    3,445 
     Consumer and other   6    9    15    —    15 
         Total  $143   $3,869   $4,012   $294   $4,306 
Based on the most recent analysis performed, the following table presents the recorded investment in non-homogenous loans by internal risk rating system as of March 31, 2024 and December 31, 2023:

Based on the most recent analysis performed, the following table presents the recorded investment in non-homogenous loans by internal risk rating system as of March 31, 2024 and December 31, 2023:

 

                         
   March 31, 2024 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2024   2023   2022   2021   2020   Prior   Cost Basis   Total 
Commercial and Industrial                                        
Risk Rating                                        
Pass  $8,734   $11,909   $15,738   $15,331   $9,177   $19,180   $13,914   $93,983 
Special Mention   —    98    80    12    404    124    312    1,030 
Substandard   44    178    261    167    6    301    2,932    3,889 
Doubtful   —    —    —    —    —    —    —    — 
Total  $8,778   $12,185   $16,079   $15,510   $9,587   $19,605   $17,158   $98,902 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 
                                         
Commercial Real Estate                                        
Risk Rating                                        
Pass  $5,927   $62,623   $65,330   $66,332   $21,941   $119,494   $13,425   $355,072 
Special Mention   —    —    234    —    —    398    —    632 
Substandard   —    383    1,625    2,459    273    2,266    743    7,749 
Doubtful   —    —    —    —    —    —    —    — 
Total  $5,927   $63,006   $67,189   $68,791   $22,214   $122,158   $14,168   $363,453 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 
                                         
Total                                        
Risk Rating                                        
Pass  $14,661   $74,532   $81,068   $81,663   $31,118   $138,674   $27,339   $449,055 
Special Mention   —    98    314    12    404    522    312    1,662 
Substandard   44    561    1,886    2,626    279    2,567    3,675    11,638 
Doubtful   —    —    —    —    —    —    —    — 
Total  $14,705   $75,191   $83,268   $84,301   $31,801   $141,763   $31,326   $462,355 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 

 

 

                         
   December 31, 2023 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2023   2022   2021   2020   2019   Prior   Cost Basis   Total 
Commercial and Industrial                                        
Risk Rating                                        
Pass  $12,342   $16,357   $15,969   $9,681   $2,149   $18,068   $14,463   $89,029 
Special Mention   98    82    12    423    125    —    363    1,103 
Substandard   193    225    168    15    60    624    2,861    4,146 
Doubtful   —    —    —    —    —    —    —    — 
Total  $12,633   $16,664   $16,149   $10,119   $2,334   $18,692   $17,687   $94,278 
Current period gross charge-offs  $—   $—   $—   $—   $—   $—   $—   $— 
                                         
Commercial Real Estate                                        
Risk Rating                                        
Pass  $61,858   $65,974   $66,974   $23,184   $20,199   $100,528   $11,116   $349,833 
Special Mention   —    236    —    —    —    404    —    640 
Substandard   364    1,648    2,473    277    620    3,471    476    9,329 
Doubtful   —    —    —    —    —    —    —    — 
Total  $62,222   $67,858   $69,447   $23,461   $20,819   $104,403   $11,592   $359,802 
Current period gross charge-offs  $—   $—   $—   $—   $—   $70   $—   $70 
                                         
Total                                        
Risk Rating                                        
Pass  $74,200   $82,331   $82,943   $32,865   $22,348   $118,596   $25,579   $438,862 
Special Mention   98    318    12    423    125    404    363    1,743 
Substandard   557    1,873    2,641    292    680    4,095    3,337    13,475 
Doubtful   —    —    —    —    —    —    —    — 
Total  $74,855   $84,522   $85,596   $33,580   $23,153   $123,095   $29,279   $454,080 
Current period gross charge-offs  $—   $—   $—   $—   $—   $70   $—   $70 

 

 

The Bank monitors the credit risk profile by payment activity for residential real estate, consumer, and other loan classes. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. Nonperforming loans are reviewed quarterly. The following table presents the amortized cost in residential real estate, and consumer and other loans based on payment activity as of March 31, 2024 and December 31, 2023:

 

                         
   March 31, 2024 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2024   2023   2022   2021   2020   Prior   Cost Basis   Total 
Residential Real Estate                                        
Payment Performance                                        
Performing  $13,930   $86,934   $112,082   $84,053   $59,082   $171,039   $61,084   $588,204 
Nonperforming   —    269    978    1,631    454    1,567    877    5,776 
Total  $13,930   $87,203   $113,060   $85,684   $59,536   $172,606   $61,961   $593,980 
Current period gross charge-offs  $—   $—   $—   $—   $—   $45   $—   $45 
                                         
Consumer and Other                                        
Payment Performance                                        
Performing  $1,307   $5,081   $9,512   $1,950   $816   $1,417   $4,305   $24,388 
Nonperforming   —    —    8    2    —    —    14    24 
Total  $1,307   $5,081   $9,520   $1,952   $816   $1,417   $4,319   $24,412 
Current period gross charge-offs  $—   $7   $—   $—   $—   $4   $—   $11 
                                         
Total                                        
Payment Performance                                        
Performing  $15,237   $92,015   $121,594   $86,003   $59,898   $172,456   $65,389   $612,592 
Nonperforming   —    269    986    1,633    454    1,567    891    5,800 
Total  $15,237   $92,284   $122,580   $87,636   $60,352   $174,023   $66,280   $618,392 
Current period gross charge-offs  $—   $7   $—   $—   $—   $49   $—   $56 

 

 

   December 31, 2023 
                           Revolving     
                           Loans     
   Term Loans Amortized Cost Basis by Origination Period   Amortized     
(In Thousands)  2023   2022   2021   2020   2019   Prior   Cost Basis   Total 
Residential Real Estate                                        
Payment Performance                                        
Performing  $85,542   $111,413   $84,007   $57,696   $28,192   $141,952   $77,037   $585,839 
Nonperforming   275    92    536    455    443    1,644    —    3,445 
Total  $85,817   $111,505   $84,543   $58,151   $28,635   $143,596   $77,037   $589,284 
Current period gross charge-offs  $—   $—   $—   $—   $—   $79   $—   $79 
                                         
Consumer and Other                                        
Payment Performance                                        
Performing  $5,618   $10,145   $2,330   $990   $394   $1,193   $4,380   $25,050 
Nonperforming   5    8    1    —    —    1    —    15 
Total  $5,623   $10,153   $2,331   $990   $394   $1,194   $4,380   $25,065 
Current period gross charge-offs  $1   $17   $13   $—   $3   $13   $—   $47 
                                         
Total                                        
Payment Performance                                        
Performing  $91,160   $121,558   $86,337   $58,686   $28,586   $143,145   $81,417   $610,889 
Nonperforming   280    100    537    455    443    1,645    —    3,460 
Total  $91,440   $121,658   $86,874   $59,141   $29,029   $144,790   $81,417   $614,349 
Current period gross charge-offs  $1   $17   $13   $—   $3   $92   $—   $126 
v3.24.1.1.u2
DEPOSITS (Tables)
 3 Months Ended
Mar. 31, 2024
Major classifications of deposits at March 31, 2024 and December 31, 2023 consisted of:

Major classifications of deposits at March 31, 2024 and December 31, 2023 consisted of:

 

(In Thousands)  March 31, 2024   December 31, 2023 
Demand deposits  $263,954   $266,015 
Interest-bearing demand deposits   298,122    251,953 
Savings   203,002    204,968 
Money market   112,190    103,602 
Time deposits   336,232    324,131 
Total deposits  $1,213,500   $1,150,669 
v3.24.1.1.u2
BORROWED FUNDS (Tables)
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
The outstanding balances and related information for short-term borrowings are summarized as follows:

 

Short-term borrowings include repurchase agreements with customers and advances from the FHLB. As of March 31, 2024, the Bank was approved by the FHLB for borrowings of up to $544,914,000 of which $70,420,000 was outstanding in the form of advances and the FHLB had issued letters of credit on the Bank’s behalf totaling $106,300,000 against its borrowing capacity. Advances from the FHLB are secured by qualifying assets of the Bank. In addition to the outstanding balances noted below, the Bank also has additional lines of credit totaling $19,030,000 available from correspondent banks other than the FHLB. The outstanding balances and related information for short-term borrowings are summarized as follows:

 

             
   March 31, 2024 
       Maximum   Weighted 
   Ending   Month End   Average Rate 
(In Thousands)  Balance   Balance   At Period End 
Securities sold under agreements to repurchase  $121,913   $185,380    4.75%
Other short-term borrowings   4,000    34,000    5.67%
Total  $125,913   $219,380    4.78%

 

 

             
   December 31, 2023 
       Maximum   Weighted 
   Ending   Month End   Average Rate 
(In Thousands)  Balance   Balance   At Period End 
Securities sold under agreements to repurchase  $189,532   $200,311    4.85%
Other short-term borrowings   63,000    63,000    5.68%
Total  $252,532   $263,311    5.10%
The remaining contractual maturity of repurchase agreements in the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 is presented in the following tables:

The remaining contractual maturity of repurchase agreements in the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 is presented in the following tables:

 

                          
   Remaining Contractual Maturity of the Agreements 
   Overnight  and           Greater than 90     
(In Thousands)  Continuous   Up to 30 Days   30-90 Days   Days   Total 
March 31, 2024                         
Securities sold under agreements to repurchase:                         
Obligation of U.S. Government Corporations and Agencies:                         
Mortgage-backed  $85,999   $—   $—   $—   $85,999 
Collateralized mortgage obligations   703    —    —    —    703 
Other   27,234    —    —    4,537    31,771 
Obligation of state and political subdivisions   3,440    —    —    —    3,440 
Total borrowings  $117,376   $—   $—   $4,537   $121,913 
                          
Gross amount of recognized liabilities for repurchase agreements       $121,913 
Amounts related to agreements not included in offsetting disclosure above       $— 

 

   Remaining Contractual Maturity of the Agreements 
   Overnight  and           Greater than 90     
(In Thousands)  Continuous   Up to 30 Days   30-90 Days   Days   Total 
December 31, 2023                         
Securities sold under agreements to repurchase:                         
Obligation of U.S. Government Corporations and Agencies:                         
Mortgage-backed  $93,137   $—   $—   $—   $93,137 
Other   92,151    1,663    1,094    1,487    96,395 
Total borrowings  $185,288   $1,663   $1,094   $1,487   $189,532 
                          
Gross amount of recognized liabilities for repurchase agreements       $189,532 
Amounts related to agreements not included in offsetting disclosure above       $— 
Long-term FHLB borrowings consisted of the following at March 31, 2024 and December 31, 2023:

Long-term FHLB borrowings consisted of the following at March 31, 2024 and December 31, 2023:

 

         
(In Thousands)  March 31, 2024   December 31, 2023 
Loans maturing in 2024 with a weighted-average rate of 4.98%  $10,208   $15,208 
Loans maturing in 2025 with a weighted-average rate of 4.79%   15,208    15,208 
Loans maturing in 2026 with a weighted-average rate of 4.05%   15,359    15,359 
Loans maturing in 2027 with a weighted-average rate of 3.93%   15,417    15,417 
Loans maturing in 2028 with a weighted-average rate of 3.85%   10,228    10,229 
Total long-term FHLB borrowings   66,420    71,421 
Unamortized fair value adjustments   (896)   (973)
Total long-term borrowings  $65,524   $70,448 
v3.24.1.1.u2
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)
 3 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of March 31, 2024 and December 31, 2023, by level within the fair value hierarchy.

The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of March 31, 2024 and December 31, 2023, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

                 
   March 31, 2024 
(In Thousands)  Level I   Level II   Level  III   Total 
Obligation of US Government Corporations and Agencies                
     Mortgage-backed  $—   $110,594   $—   $110,594 
     Collateralized mortgage obligations   —    8,049    —    8,049 
     Other   —    136,429    —    136,429 
Obligations of state and political subdivisions   —    84,247    —    84,247 
Other debt securities   —    275    —    275 
Total available-for-sale debt securities  $—   $339,594   $—   $339,594 
                     
Marketable equity securities  $1,178   $—   $—   $1,178 
                     
Real estate loans held for sale  $—   $614   $—   $614 

 

 

                 
   December 31, 2023 
(In Thousands)  Level I   Level II   Level  III   Total 
Obligation of US Government Corporations and Agencies                
     Mortgage-backed  $—   $131,340   $—   $131,340 
     Collateralized mortgage obligations   —    9,018    —    9,018 
     Other   —    187,712    —    187,712 
Obligations of state and political subdivisions   —    84,956    —    84,956 
Other debt securities   —    276    —    276 
Total available-for-sale debt securities  $—   $413,302   $—   $413,302 
                     
Marketable equity securities  $1,295   $—   $—   $1,295 
                     
Real estate loans held for sale  $—   $366   $—   $366 
The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of March 31, 2024, and December 31, 2023, by level within the fair value hierarchy.

The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of March 31, 2024, and December 31, 2023, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

                 
   March 31, 2024 
(In Thousands)  Level I   Level II   Level  III   Total 
Assets Measured on a Non-recurring Basis:                    
Loans individually evaluated for credit loss  $—   $—   $8,116   $8,116 
   $—   $—   $8,116   $8,116 

 

   December 31, 2023 
(In Thousands)  Level I   Level II   Level  III   Total 
Assets Measured on a Non-recurring Basis:                    
Loans individually evaluated for credit loss  $—   $—   $8,136   $8,136 
   $—   $—   $8,136   $8,136 
The following table provides a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques on a nonrecurring basis as of March 31, 2024 and December 31, 2023:

The fair value of loans individually evaluated for credit loss are measured using a discounted cash flow approach.  Loans individually evaluated for credit loss are reviewed and evaluated on at least a quarterly basis for individual reserve requirements and adjusted accordingly. The following table provides a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques on a nonrecurring basis as of March 31, 2024 and December 31, 2023:

 

   March 31, 2024 
   Quantitative Information about Level III Fair Value Measurements 
(In Thousands)  Fair Value
Estimate		  

Valuation

Technique

 

Unobservable

Input

  Range   Weighted
Average		 
Loans individually evaluated for credit loss  $8,116   Discounted cash flows  Charge-off rates   0-100%    18.25%
                      

 

   December 31, 2023 
   Quantitative Information about Level III Fair Value Measurements 
(In Thousands)  Fair Value
Estimate		  

Valuation

Technique

 

Unobservable

Input

  Range   Weighted
Average		 
Loans individually evaluated for credit loss  $8,136   Discounted cash flows  Charge-off rates   0-100%    18.22%
At March 31, 2024 and December 31, 2023, the carrying values and fair values of financial instruments that are not recorded at fair value in the consolidated financial statements are presented in the table below:

 At March 31, 2024 and December 31, 2023, the carrying values and fair values of financial instruments that are not recorded at fair value in the consolidated financial statements are presented in the table below:

 

                          
   March 31, 2024
(In Thousands)  Carrying
Amount		   Fair Value   Level I   Level II   Level III 
Financial assets:                         
Cash and cash equivalents  $16,231   $16,231   $16,231   $—    $—  
Interest-bearing time deposits   736    737    —     737    —  
Restricted equity securities   8,013    8,013    —     8,013    —  
Loans, net   1,071,396    991,967    —     —     991,967 
Accrued interest receivable   4,849    4,849    —     4,849      
Mortgage servicing rights   1,961    2,080    —     —     2,080 
                          
Financial liabilities:                         
Interest-bearing deposits  $949,546   $948,001   $—    $613,314   $334,687 
Noninterest-bearing deposits   263,954    263,954    —     263,954    —  
Short-term borrowings   125,913    125,913    —     125,913    —  
Long-term borrowings   65,524    63,965    —     —     63,965 
Accrued interest payable   2,281    2,281    —     2,281    —  

 

   December 31, 2023
(In Thousands)  Carrying
Amount		   Fair Value   Level I   Level II   Level III 
Financial assets:                         
Cash and cash equivalents  $18,377   $18,377   $18,377   $—    $—  
Interest-bearing time deposits   979    982    —     982    —  
Restricted equity securities   10,394    10,394    —     10,394    —  
Loans, net   1,059,127    972,834    —     —     972,834 
Accrued interest receivable   5,362    5,362    —     5,362      
Mortgage servicing rights   2,035    2,107    —     —     2,107 
                          
Financial liabilities:                         
Interest-bearing deposits  $884,654   $883,434   $—    $560,521   $322,913 
Noninterest-bearing deposits   266,015    266,015    —     266,015    —  
Short-term borrowings   252,532    252,532    —     252,532    —  
Long-term borrowings   70,448    68,887    —     —     68,887 
Accrued interest payable   2,358    2,358    —     2,358    —  
                          
v3.24.1.1.u2
BUSINESS COMBINATION (Details Narrative) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Nov. 11, 2023
Business Acquisition [Line Items]      
Goodwill $ 25,609 $ 25,609  
Loans 1,071,396 1,059,127  
Bank-owned life insurance 40,456 40,209  
Deposits $ 1,213,500 $ 1,150,669  
Muncy Bank Financial, Inc. [Member]      
Business Acquisition [Line Items]      
Goodwill     $ 17,700
Core deposit intangible     12,100
Loans     504,100
Available-for-sale debt securities     93,000
Bank-owned life insurance     17,800
Premises and equipment, net     14,900
Deposits     521,300
Borrowings     $ 105,500
v3.24.1.1.u2
The amortized cost, related estimated fair value, and unrealized gains and losses of available-for-sale debt securities were as follows at March 31, 2024 and December 31, 2023: (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Marketable Securities [Line Items]    
Amortized Cost $ 360,513 $ 432,336
Gross Unrealized Gains 3,618 5,702
Gross Unrealized Losses (24,537) (24,736)
Fair Value 339,594 413,302
Collateralized Mortgage-Backed Securities [Member]    
Marketable Securities [Line Items]    
Amortized Cost 126,286 145,196
Gross Unrealized Gains 115 1,158
Gross Unrealized Losses (15,807) (15,014)
Fair Value 110,594 131,340
Collateralized Debt Obligations [Member]    
Marketable Securities [Line Items]    
Amortized Cost 7,698 8,515
Gross Unrealized Gains 351 503
Gross Unrealized Losses
Fair Value 8,049 9,018
Other Debt Obligations [Member]    
Marketable Securities [Line Items]    
Amortized Cost 145,000 197,325
Gross Unrealized Gains
Gross Unrealized Losses (8,571) (9,613)
Fair Value 136,429 187,712
US States and Political Subdivisions Debt Securities [Member]    
Marketable Securities [Line Items]    
Amortized Cost 81,261 81,033
Gross Unrealized Gains 3,145 4,032
Gross Unrealized Losses (159) (109)
Fair Value 84,247 84,956
Other Securities [Member]    
Marketable Securities [Line Items]    
Amortized Cost 268 267
Gross Unrealized Gains 7 9
Gross Unrealized Losses
Fair Value $ 275 $ 276
v3.24.1.1.u2
The amortized cost and estimated fair value of investment securities, by expected maturity, are shown below at March 31, 2024. (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Marketable Securities [Line Items]    
Due in one year or less, Amortized Cost $ 34,888  
Due in one year or less, Estimated Fair Value 33,710  
Due after one year to five years, Amortized Cost 117,204  
Due after one year to five years, Estimated Fair Value 109,777  
Due after five years to ten years, Amortized Cost 21,596  
Due after five years to ten years, Estimated Fair Value 21,944  
Due after ten years, Amortized Cost 52,841  
Due after ten years, Estimated Fair Value 55,520  
Sub-total, Amortized Cost 226,529  
Sub-total, Fair value 220,951  
Amortized Cost 360,513 $ 432,336
Fair Value 339,594 413,302
Collateralized Mortgage-Backed Securities [Member]    
Marketable Securities [Line Items]    
Amortized Cost 126,286  
Fair Value 110,594  
Amortized Cost 126,286 145,196
Fair Value 110,594 131,340
Collateralized Debt Obligations [Member]    
Marketable Securities [Line Items]    
Amortized Cost 7,698  
Fair Value 8,049  
Amortized Cost 7,698 8,515
Fair Value $ 8,049 $ 9,018
v3.24.1.1.u2
The following summary shows the gross unrealized losses and fair value, aggregated by investment category of those individual securities for which an allowance for credit losses has not been recorded that have been in a continuous unrealized loss position (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Marketable Securities [Line Items]    
Less than Twelve Months Fair Value $ 14,421 $ 10,331
Less than Twelve Months Gross Unrealized Losses (146) (91)
Twelve Months or Greater Fair Value 245,997 302,259
Twelve Months or Greater Gross Unrealized Losses (24,391) (24,645)
Total Fair Value 260,418 312,590
Total Gross Unrealized Losses (24,537) (24,736)
Collateralized Mortgage-Backed Securities [Member]    
Marketable Securities [Line Items]    
Less than Twelve Months Fair Value 212 47
Less than Twelve Months Gross Unrealized Losses (4) (1)
Twelve Months or Greater Fair Value 108,228 112,884
Twelve Months or Greater Gross Unrealized Losses (15,803) (15,013)
Total Fair Value 108,440 112,931
Total Gross Unrealized Losses (15,807) (15,014)
Other Debt Obligations [Member]    
Marketable Securities [Line Items]    
Less than Twelve Months Fair Value
Less than Twelve Months Gross Unrealized Losses
Twelve Months or Greater Fair Value 136,429 187,712
Twelve Months or Greater Gross Unrealized Losses (8,571) (9,613)
Total Fair Value 136,429 187,712
Total Gross Unrealized Losses (8,571) (9,613)
US States and Political Subdivisions Debt Securities [Member]    
Marketable Securities [Line Items]    
Less than Twelve Months Fair Value 14,209 10,284
Less than Twelve Months Gross Unrealized Losses (142) (90)
Twelve Months or Greater Fair Value 1,340 1,663
Twelve Months or Greater Gross Unrealized Losses (17) (19)
Total Fair Value 15,549 11,947
Total Gross Unrealized Losses $ (159) $ (109)
v3.24.1.1.u2
The following is a summary of unrealized and realized gains and losses recognized in net income on marketable equity securities during the three months ended March 31, 2024 and 2023: (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]      
Investment equity securities, at fair value $ 1,178   $ 1,295
Loss on equity securities (117) $ (81)  
Less: Net gains (losses) realized on the sale of equity securities during the quarter  
Unrealized losses recognized in equity securities held at reporting date $ (117) $ (81)  
v3.24.1.1.u2
SECURITIES (Details Narrative)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
USD ($)
N
Mar. 31, 2023
USD ($)
Dec. 31, 2023
USD ($)
Variable Interest Entity [Line Items]      
Available-for-sale debt securities, at fair value $ 339,594   $ 413,302
Proceeds from the sale of investments in debt securities 50,311  
Realized gross gains 595    
Realized gross losses $ 603    
Number of debt securities in gross unrealized loss position for less than twelve months | N 48    
Securities in gross unrealized loss position for less than twelve months, depreciation percentage from amortized cost basis 1.00%    
Number of debt securities in gross unrealized loss position for 12 Months or Longer, Number of Positions | N 122    
Securities in gross unrealized loss position for more than twelve months, depreciation percentage from amortized cost basis 9.00%    
Asset Pledged as Collateral [Member]      
Variable Interest Entity [Line Items]      
Available-for-sale debt securities, at fair value $ 176,203   $ 263,706
v3.24.1.1.u2
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Details Narrative) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Deferred fees and costs $ 809   $ 779
(Credit) Provision for credit losses - loans 101 $ (418)  
Non-performing assets 6,876   $ 4,012
Net charge-offs (recoveries) $ 52 $ (48)  
Allowance for loan losses, percentage of non-performing assets 133.80%   216.00%
Allowance for loan losses, percentage of total loans 0.87%   0.87%
Nonperforming Financial Instruments [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Non-performing assets $ 7,328   $ 4,475
Percentage of loans 0.65%   0.40%
Nonperforming Financial Instruments [Member] | Real Estate Loan [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Non-performing assets $ 2,221    
v3.24.1.1.u2
Major classifications of loans at March 31, 2024 and December 31, 2023 consisted of: (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Gross loans $ 1,080,747 $ 1,068,429
Commercial And Industrial [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Gross loans 98,902 94,278
Commercial Loan [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Gross loans 327,987 326,152
Student Housing [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Gross loans 35,466 33,650
Rental 1-4 Family [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Gross loans 56,125 54,078
Residential Mortgage [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Gross loans 537,855 535,206
Consumer Loan [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Gross loans $ 24,412 $ 25,065
v3.24.1.1.u2
The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2024 and 2023: (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance $ 9,302 $ 7,279
(Credit) provision charged to operations 101 (418)
Loans charged off (56) (6)
Recoveries 4 54
Ending Balance 9,351 6,288
Cumulative Effect, Period of Adoption, Adjustment [Member]    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance   (621)
Commercial Portfolio Segment [Member]    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance 801 1,041
(Credit) provision charged to operations (90) (117)
Loans charged off
Recoveries 1 49
Ending Balance 712 12
Commercial Portfolio Segment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance   (961)
Commercial Real Estate Portfolio Segment [Member]    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance 6,847 2,897
(Credit) provision charged to operations 319 (391)
Loans charged off
Recoveries 1
Ending Balance 7,166 5,712
Commercial Real Estate Portfolio Segment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance   3,205
Residential Portfolio Segment [Member]    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance 1,474 3,077
(Credit) provision charged to operations (368) 97
Loans charged off (45) (6)
Recoveries 1 4
Ending Balance 1,062 552
Residential Portfolio Segment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance   (2,620)
Consumer And Other [Member].    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance 180 60
(Credit) provision charged to operations 240 (7)
Loans charged off (11)
Recoveries 2
Ending Balance 411 12
Consumer And Other [Member]. | Cumulative Effect, Period of Adoption, Adjustment [Member]    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance   (41)
Unallocated Financing Receivables [Member]    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance 204
(Credit) provision charged to operations
Loans charged off
Recoveries
Ending Balance
Unallocated Financing Receivables [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Beginning Balance   $ (204)
v3.24.1.1.u2
The following table summarizes the loan portfolio and allowance for credit losses as of March 31, 2024 and December 31, 2023: (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Mar. 31, 2023
Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Individually evaluated $ 12,169 $ 12,279    
Collectively evaluated 1,068,578 1,056,150    
Total loans 1,080,747 1,068,429    
Individually evaluated 4,053 4,143    
Collectively evaluated 5,298 5,159    
Total allowance for credit losses 9,351 9,302 $ 6,288 $ 7,279
Commercial And Industrial [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Individually evaluated    
Collectively evaluated 98,902 94,278    
Total loans 98,902 94,278    
Individually evaluated    
Collectively evaluated 712 801    
Total allowance for credit losses 712 801    
Commercial Real Estate [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Individually evaluated 12,169 12,279    
Collectively evaluated 351,284 347,523    
Total loans 363,453 359,802    
Individually evaluated 4,053 4,143    
Collectively evaluated 3,113 2,704    
Total allowance for credit losses 7,166 6,847    
Residential Real Estate [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Individually evaluated    
Collectively evaluated 593,980 589,284    
Total loans 593,980 589,284    
Individually evaluated    
Collectively evaluated 1,062 1,474    
Total allowance for credit losses 1,062 1,474    
Consumer And Other [Member].        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Individually evaluated    
Collectively evaluated 24,412 25,065    
Total loans 24,412 25,065    
Individually evaluated    
Collectively evaluated 411 180    
Total allowance for credit losses $ 411 $ 180 $ 12 $ 60
v3.24.1.1.u2
The following table presents the classes of the loan portfolio summarized by the past-due status as of March 31, 2024 and December 31, 2023: (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Financing Receivable, Past Due [Line Items]    
Gross loans $ 1,080,747 $ 1,068,429
Financial Asset, Not Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 1,069,167 1,053,422
Financial Asset, 30 to 59 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 6,938 9,757
Financial Asset, 60 to 89 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 1,443 2,345
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 3,199 2,905
Financial Asset, Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 11,580 15,007
Commercial And Industrial [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 98,902 94,278
Commercial And Industrial [Member] | Financial Asset, Not Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 98,300 93,879
Commercial And Industrial [Member] | Financial Asset, 30 to 59 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 449 129
Commercial And Industrial [Member] | Financial Asset, 60 to 89 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 100 233
Commercial And Industrial [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 53 37
Commercial And Industrial [Member] | Financial Asset, Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 602 399
Commercial Real Estate [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 363,453 359,802
Commercial Real Estate [Member] | Financial Asset, Not Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 361,614 355,786
Commercial Real Estate [Member] | Financial Asset, 30 to 59 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 1,099 2,316
Commercial Real Estate [Member] | Financial Asset, 60 to 89 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 358 960
Commercial Real Estate [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 382 740
Commercial Real Estate [Member] | Financial Asset, Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 1,839 4,016
Residential Real Estate [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 593,980 589,284
Residential Real Estate [Member] | Financial Asset, Not Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 584,928 578,802
Residential Real Estate [Member] | Financial Asset, 30 to 59 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 5,314 7,226
Residential Real Estate [Member] | Financial Asset, 60 to 89 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 975 1,134
Residential Real Estate [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 2,763 2,122
Residential Real Estate [Member] | Financial Asset, Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 9,052 10,482
Consumer And Other [Member].    
Financing Receivable, Past Due [Line Items]    
Gross loans 24,412 25,065
Consumer And Other [Member]. | Financial Asset, Not Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 24,325 24,955
Consumer And Other [Member]. | Financial Asset, 30 to 59 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 76 86
Consumer And Other [Member]. | Financial Asset, 60 to 89 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 10 18
Consumer And Other [Member]. | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans 1 6
Consumer And Other [Member]. | Financial Asset, Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Gross loans $ 87 $ 110
v3.24.1.1.u2
The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of March 31, 2024 and December 31, 2023: (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Financing Receivable, Past Due [Line Items]    
Nonaccrual with no ACL $ 23 $ 143
Nonaccrual with ACL 6,853 3,869
Total Nonaccrual 6,876 4,012
Loans Past Due over 90 Days Still Accruing 115 294
Nonperforming Financial Instruments [Member]    
Financing Receivable, Past Due [Line Items]    
Total Nonaccrual 7,328 4,475
Nonperforming Financial Instruments [Member] | Loans Receivable [Member]    
Financing Receivable, Past Due [Line Items]    
Total Nonaccrual 6,991 4,306
Commercial And Industrial [Member]    
Financing Receivable, Past Due [Line Items]    
Nonaccrual with no ACL 37
Nonaccrual with ACL 209 16
Total Nonaccrual 209 53
Loans Past Due over 90 Days Still Accruing
Commercial And Industrial [Member] | Nonperforming Financial Instruments [Member] | Loans Receivable [Member]    
Financing Receivable, Past Due [Line Items]    
Total Nonaccrual 209 53
Commercial Real Estate [Member]    
Financing Receivable, Past Due [Line Items]    
Nonaccrual with no ACL 100
Nonaccrual with ACL 982 693
Total Nonaccrual 982 793
Loans Past Due over 90 Days Still Accruing
Commercial Real Estate [Member] | Nonperforming Financial Instruments [Member] | Loans Receivable [Member]    
Financing Receivable, Past Due [Line Items]    
Total Nonaccrual 982 793
Residential Real Estate [Member]    
Financing Receivable, Past Due [Line Items]    
Nonaccrual with no ACL
Nonaccrual with ACL 5,661 3,151
Total Nonaccrual 5,661 3,151
Loans Past Due over 90 Days Still Accruing 115 294
Residential Real Estate [Member] | Nonperforming Financial Instruments [Member] | Loans Receivable [Member]    
Financing Receivable, Past Due [Line Items]    
Total Nonaccrual 5,776 3,445
Consumer And Other [Member].    
Financing Receivable, Past Due [Line Items]    
Nonaccrual with no ACL 23 6
Nonaccrual with ACL 1 9
Total Nonaccrual 24 15
Loans Past Due over 90 Days Still Accruing
Consumer And Other [Member]. | Nonperforming Financial Instruments [Member] | Loans Receivable [Member]    
Financing Receivable, Past Due [Line Items]    
Total Nonaccrual $ 24 $ 15
v3.24.1.1.u2
Based on the most recent analysis performed, the following table presents the recorded investment in non-homogenous loans by internal risk rating system as of March 31, 2024 and December 31, 2023: (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss $ 1,080,747 $ 1,068,429
Commercial And Industrial Portfolio Segment [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 8,778 12,633
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 12,185 16,664
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 16,079 16,149
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 15,510 10,119
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 9,587 2,334
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 19,605 18,692
Financing Receivable, Excluding Accrued Interest, Revolving 17,158 17,687
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 98,902 94,278
Commercial And Industrial Portfolio Segment [Member] | Pass [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 8,734 12,342
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 11,909 16,357
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 15,738 15,969
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 15,331 9,681
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 9,177 2,149
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 19,180 18,068
Financing Receivable, Excluding Accrued Interest, Revolving 13,914 14,463
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 93,983 89,029
Commercial And Industrial Portfolio Segment [Member] | Special Mention [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 98
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 98 82
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 80 12
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 12 423
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 404 125
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 124
Financing Receivable, Excluding Accrued Interest, Revolving 312 363
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 1,030 1,103
Commercial And Industrial Portfolio Segment [Member] | Substandard [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 44 193
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 178 225
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 261 168
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 167 15
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 6 60
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 301 624
Financing Receivable, Excluding Accrued Interest, Revolving 2,932 2,861
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 3,889 4,146
Commercial And Industrial Portfolio Segment [Member] | Doubtful [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Revolving
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss
Commercial Real Estate Portfolio Segment [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 5,927 62,222
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 63,006 67,858
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 67,189 69,447
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 68,791 23,461
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 22,214 20,819
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 122,158 104,403
Financing Receivable, Excluding Accrued Interest, Revolving 14,168 11,592
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 363,453 359,802
Commercial Real Estate Portfolio Segment [Member] | Pass [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 5,927 61,858
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 62,623 65,974
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 65,330 66,974
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 66,332 23,184
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 21,941 20,199
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 119,494 100,528
Financing Receivable, Excluding Accrued Interest, Revolving 13,425 11,116
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 355,072 349,833
Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 236
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 234
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 398 404
Financing Receivable, Excluding Accrued Interest, Revolving
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 632 640
Commercial Real Estate Portfolio Segment [Member] | Substandard [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 364
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 383 1,648
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 1,625 2,473
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 2,459 277
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 273 620
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 2,266 3,471
Financing Receivable, Excluding Accrued Interest, Revolving 743 476
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 7,749 9,329
Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Revolving
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss
Commercial Real Estate Portfolio Segment [Member] | Current Period Gross Charge Offs [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year  
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year  
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year  
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year  
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year  
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year   70
Financing Receivable, Excluding Accrued Interest, Revolving  
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss   70
Commercial Real Estate Commercial And Industrial Portfolio Segment [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 14,705 74,855
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 75,191 84,522
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 83,268 85,596
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 84,301 33,580
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 31,801 23,153
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 141,763 123,095
Financing Receivable, Excluding Accrued Interest, Revolving 31,326 29,279
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 462,355 454,080
Commercial Real Estate Commercial And Industrial Portfolio Segment [Member] | Pass [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 14,661 74,200
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 74,532 82,331
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 81,068 82,943
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 81,663 32,865
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 31,118 22,348
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 138,674 118,596
Financing Receivable, Excluding Accrued Interest, Revolving 27,339 25,579
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 449,055 438,862
Commercial Real Estate Commercial And Industrial Portfolio Segment [Member] | Special Mention [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 98
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 98 318
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 314 12
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 12 423
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 404 125
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 522 404
Financing Receivable, Excluding Accrued Interest, Revolving 312 363
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 1,662 1,743
Commercial Real Estate Commercial And Industrial Portfolio Segment [Member] | Substandard [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 44 557
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 561 1,873
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 1,886 2,641
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 2,626 292
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 279 680
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 2,567 4,095
Financing Receivable, Excluding Accrued Interest, Revolving 3,675 3,337
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 11,638 13,475
Commercial Real Estate Commercial And Industrial Portfolio Segment [Member] | Doubtful [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Revolving
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss
Commercial Real Estate Commercial And Industrial Portfolio Segment [Member] | Current Period Gross Charge Offs [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year  
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year  
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year  
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year  
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year  
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year   70
Financing Receivable, Excluding Accrued Interest, Revolving  
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss   70
Residential Portfolio Segment [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 13,930 85,817
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 87,203 111,505
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 113,060 84,543
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 85,684 58,151
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 59,536 28,635
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 172,606 143,596
Financing Receivable, Excluding Accrued Interest, Revolving 61,961 77,037
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 593,980 589,284
Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 13,930 85,542
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 86,934 111,413
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 112,082 84,007
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 84,053 57,696
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 59,082 28,192
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 171,039 141,952
Financing Receivable, Excluding Accrued Interest, Revolving 61,084 77,037
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 588,204 585,839
Residential Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 275
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 269 92
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 978 536
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 1,631 455
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 454 443
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 1,567 1,644
Financing Receivable, Excluding Accrued Interest, Revolving 877
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 5,776 3,445
Residential Portfolio Segment [Member] | Current Period Gross Charge Offs [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 45 79
Financing Receivable, Excluding Accrued Interest, Revolving
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 45 79
Consumer And Other [Member].    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 1,307 5,623
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 5,081 10,153
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 9,520 2,331
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 1,952 990
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 816 394
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 1,417 1,194
Financing Receivable, Excluding Accrued Interest, Revolving 4,319 4,380
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 24,412 25,065
Consumer And Other [Member]. | Performing Financial Instruments [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 1,307 5,618
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 5,081 10,145
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 9,512 2,330
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 1,950 990
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 816 394
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 1,417 1,193
Financing Receivable, Excluding Accrued Interest, Revolving 4,305 4,380
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 24,388 25,050
Consumer And Other [Member]. | Nonperforming Financial Instruments [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 5
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 8
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 8 1
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 2
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 1
Financing Receivable, Excluding Accrued Interest, Revolving 14
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 24 15
Consumer And Other [Member]. | Current Period Gross Charge Offs [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 1
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 7 17
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 13
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 3
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 4 13
Financing Receivable, Excluding Accrued Interest, Revolving
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 11 47
Residential Consumer And Other [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 15,237 91,440
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 92,284 121,658
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 122,580 86,874
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 87,636 59,141
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 60,352 29,029
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 174,023 144,790
Financing Receivable, Excluding Accrued Interest, Revolving 66,280 81,417
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 618,392 614,349
Residential Consumer And Other [Member] | Performing Financial Instruments [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 15,237 91,160
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 92,015 121,558
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 121,594 86,337
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 86,003 58,686
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 59,898 28,586
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 172,456 143,145
Financing Receivable, Excluding Accrued Interest, Revolving 65,389 81,417
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 612,592 610,889
Residential Consumer And Other [Member] | Nonperforming Financial Instruments [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 280
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 269 100
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 986 537
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year 1,633 455
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 454 443
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 1,567 1,645
Financing Receivable, Excluding Accrued Interest, Revolving 891
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss 5,800 3,460
Residential Consumer And Other [Member] | Current Period Gross Charge Offs [Member]    
Financing Receivable, Credit Quality Indicator [Line Items]    
Financing Receivable, Excluding Accrued Interest, Year One, Originated, Current Fiscal Year 1
Financing Receivable, Excluding Accrued Interest, Year Two, Originated, Fiscal Year before Current Fiscal Year 7 17
Financing Receivable, Excluding Accrued Interest, Year Three, Originated, Two Years before Current Fiscal Year 13
Financing Receivable, Excluding Accrued Interest, Year Four, Originated, Three Years before Current Fiscal Year
Financing Receivable, Excluding Accrued Interest, Year Five, Originated, Four Years before Current Fiscal Year 3
Financing Receivable, Excluding Accrued Interest, Originated, More than Five Years before Current Fiscal Year 49 92
Financing Receivable, Excluding Accrued Interest, Revolving
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss $ 56 $ 126
v3.24.1.1.u2
Major classifications of deposits at March 31, 2024 and December 31, 2023 consisted of: (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Deposits [Abstract]    
Demand deposits $ 263,954 $ 266,015
Interest-bearing demand deposits 298,122 251,953
Savings 203,002 204,968
Money market 112,190 103,602
Time deposits 336,232 324,131
Total deposits $ 1,213,500 $ 1,150,669
v3.24.1.1.u2
DEPOSITS (Details Narrative) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Deposits [Abstract]    
Time Deposits, $250,000 or More $ 100,236 $ 94,445
v3.24.1.1.u2
BORROWED FUNDS (Details Narrative) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available $ 544,914  
Federal Home Loan Bank, Advance 70,420  
Letters of Credit Outstanding, Amount 106,300  
Line of Credit Facility, Maximum Borrowing Capacity $ 19,030  
Asset Pledged as Collateral [Member] | Securities Sold under Agreements to Repurchase [Member]    
Debt Instrument [Line Items]    
Pledged percentage of outstanding balance of repurchase agreements 110.00%  
Financial Instruments, Owned, at Fair Value $ 139,482 $ 219,227
v3.24.1.1.u2
The outstanding balances and related information for short-term borrowings are summarized as follows: (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Short-Term Debt [Line Items]    
Short-Term Debt $ 125,913 $ 252,532
Short-Term Debt, Maximum Month-end Outstanding Amount $ 219,380 $ 263,311
Short-Term Debt, Weighted Average Interest Rate, at Point in Time 4.78% 5.10%
Securities Sold under Agreements to Repurchase [Member]    
Short-Term Debt [Line Items]    
Short-Term Debt $ 121,913 $ 189,532
Short-Term Debt, Maximum Month-end Outstanding Amount $ 185,380 $ 200,311
Short-Term Debt, Weighted Average Interest Rate, at Point in Time 4.75% 4.85%
Other Short Term Borrowings [Member]    
Short-Term Debt [Line Items]    
Short-Term Debt $ 4,000 $ 63,000
Short-Term Debt, Maximum Month-end Outstanding Amount $ 34,000 $ 63,000
Short-Term Debt, Weighted Average Interest Rate, at Point in Time 5.67% 5.68%
v3.24.1.1.u2
The remaining contractual maturity of repurchase agreements in the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 is presented in the following tables: (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Short-Term Debt [Line Items]    
Total borrowings $ 125,913 $ 252,532
Securities Sold under Agreements to Repurchase [Member]    
Short-Term Debt [Line Items]    
Total borrowings 121,913 189,532
Gross amount of recognized liabilities for repurchase agreements 121,913 189,532
Securities Sold under Agreements to Repurchase [Member] | Maturity Overnight and on Demand [Member]    
Short-Term Debt [Line Items]    
Total borrowings 117,376 185,288
Securities Sold under Agreements to Repurchase [Member] | Maturity Less than 30 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings 1,663
Securities Sold under Agreements to Repurchase [Member] | Maturity 30 to 90 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings 1,094
Securities Sold under Agreements to Repurchase [Member] | Maturity Greater than 90 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings 4,537 1,487
Securities Sold under Agreements to Repurchase [Member] | Collateralized Mortgage-Backed Securities [Member]    
Short-Term Debt [Line Items]    
Total borrowings 85,999 93,137
Securities Sold under Agreements to Repurchase [Member] | Collateralized Mortgage-Backed Securities [Member] | Maturity Overnight and on Demand [Member]    
Short-Term Debt [Line Items]    
Total borrowings 85,999 93,137
Securities Sold under Agreements to Repurchase [Member] | Collateralized Mortgage-Backed Securities [Member] | Maturity Less than 30 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings
Securities Sold under Agreements to Repurchase [Member] | Collateralized Mortgage-Backed Securities [Member] | Maturity 30 to 90 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings
Securities Sold under Agreements to Repurchase [Member] | Collateralized Mortgage-Backed Securities [Member] | Maturity Greater than 90 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings
Securities Sold under Agreements to Repurchase [Member] | Collateralized Debt Obligations [Member]    
Short-Term Debt [Line Items]    
Total borrowings 703  
Securities Sold under Agreements to Repurchase [Member] | Collateralized Debt Obligations [Member] | Maturity Overnight and on Demand [Member]    
Short-Term Debt [Line Items]    
Total borrowings 703  
Securities Sold under Agreements to Repurchase [Member] | Collateralized Debt Obligations [Member] | Maturity Less than 30 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings  
Securities Sold under Agreements to Repurchase [Member] | Collateralized Debt Obligations [Member] | Maturity 30 to 90 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings  
Securities Sold under Agreements to Repurchase [Member] | Collateralized Debt Obligations [Member] | Maturity Greater than 90 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings  
Securities Sold under Agreements to Repurchase [Member] | Other Debt Obligations [Member]    
Short-Term Debt [Line Items]    
Total borrowings 31,771 96,395
Securities Sold under Agreements to Repurchase [Member] | Other Debt Obligations [Member] | Maturity Overnight and on Demand [Member]    
Short-Term Debt [Line Items]    
Total borrowings 27,234 92,151
Securities Sold under Agreements to Repurchase [Member] | Other Debt Obligations [Member] | Maturity Less than 30 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings 1,663
Securities Sold under Agreements to Repurchase [Member] | Other Debt Obligations [Member] | Maturity 30 to 90 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings 1,094
Securities Sold under Agreements to Repurchase [Member] | Other Debt Obligations [Member] | Maturity Greater than 90 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings 4,537 $ 1,487
Securities Sold under Agreements to Repurchase [Member] | US States and Political Subdivisions Debt Securities [Member]    
Short-Term Debt [Line Items]    
Total borrowings 3,440  
Securities Sold under Agreements to Repurchase [Member] | US States and Political Subdivisions Debt Securities [Member] | Maturity Overnight and on Demand [Member]    
Short-Term Debt [Line Items]    
Total borrowings 3,440  
Securities Sold under Agreements to Repurchase [Member] | US States and Political Subdivisions Debt Securities [Member] | Maturity Less than 30 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings  
Securities Sold under Agreements to Repurchase [Member] | US States and Political Subdivisions Debt Securities [Member] | Maturity 30 to 90 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings  
Securities Sold under Agreements to Repurchase [Member] | US States and Political Subdivisions Debt Securities [Member] | Maturity Greater than 90 Days [Member]    
Short-Term Debt [Line Items]    
Total borrowings  
v3.24.1.1.u2
Long-term FHLB borrowings consisted of the following at March 31, 2024 and December 31, 2023: (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Loans maturing in 2024 with a weighted-average rate of 4.98% $ 10,208 $ 15,208
Loans maturing in 2025 with a weighted-average rate of 4.79% 15,208 15,208
Loans maturing in 2026 with a weighted-average rate of 4.05% 15,359 15,359
Loans maturing in 2027 with a weighted-average rate of 3.93% 15,417 15,417
Loans maturing in 2028 with a weighted-average rate of 3.85% 10,228 10,229
Total long-term FHLB borrowings 66,420 71,421
Unamortized fair value adjustments (896) (973)
Total long-term borrowings $ 65,524 $ 70,448
FHLB Borrowings 2024 [Member]    
Debt Instrument [Line Items]    
Weighted-average rate 4.98%  
FHLB Borrowings 2025 [Member]    
Debt Instrument [Line Items]    
Weighted-average rate 4.79%  
FHLB Borrowings 2026 [Member]    
Debt Instrument [Line Items]    
Weighted-average rate 4.05%  
FHLB Borrowings 2027 [Member]    
Debt Instrument [Line Items]    
Weighted-average rate 3.93%  
FHLB Borrowings 2028 [Member]    
Debt Instrument [Line Items]    
Weighted-average rate 3.85%  
v3.24.1.1.u2
The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of March 31, 2024 and December 31, 2023, by level within the fair value hierarchy. (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities $ 339,594 $ 413,302
Marketable equity securities 1,178 1,295
Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 339,594 413,302
Marketable equity securities 1,178 1,295
Real estate loans held for sale 614 366
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
Marketable equity securities 1,178 1,295
Real estate loans held for sale
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 339,594 413,302
Marketable equity securities
Real estate loans held for sale 614 366
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
Marketable equity securities
Real estate loans held for sale
Collateralized Mortgage-Backed Securities [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 110,594 131,340
Collateralized Mortgage-Backed Securities [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 110,594 131,340
Collateralized Mortgage-Backed Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
Collateralized Mortgage-Backed Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 110,594 131,340
Collateralized Mortgage-Backed Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
Collateralized Debt Obligations [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 8,049 9,018
Collateralized Debt Obligations [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 8,049 9,018
Collateralized Debt Obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
Collateralized Debt Obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 8,049 9,018
Collateralized Debt Obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
Other Debt Obligations [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 136,429 187,712
Other Debt Obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
Other Debt Obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 136,429 187,712
Other Debt Obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
US States and Political Subdivisions Debt Securities [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 84,247 84,956
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 84,247 84,956
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 84,247 84,956
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
Other Debt Obligations [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 136,429 187,712
Other Debt Obligations [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 275 276
Other Debt Obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
Other Debt Obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities 275 276
Other Debt Obligations [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total available-for-sale debt securities
v3.24.1.1.u2
The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of March 31, 2024, and December 31, 2023, by level within the fair value hierarchy. (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Loans individually evaluated for credit loss $ 12,169 $ 12,279
Fair Value, Nonrecurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Loans individually evaluated for credit loss 8,116 8,136
Assets Measured on a Non-recurring Basis 8,116 8,136
Fair Value, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Loans individually evaluated for credit loss
Assets Measured on a Non-recurring Basis
Fair Value, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Loans individually evaluated for credit loss
Assets Measured on a Non-recurring Basis
Fair Value, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Loans individually evaluated for credit loss 8,116 8,136
Assets Measured on a Non-recurring Basis $ 8,116 $ 8,136
v3.24.1.1.u2
The following table provides a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques on a nonrecurring basis as of March 31, 2024 and December 31, 2023: (Details)
$ in Thousands
Mar. 31, 2024
USD ($)
Dec. 31, 2023
USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Loans individually evaluated for credit loss $ 12,169 $ 12,279
Fair Value, Nonrecurring [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Loans individually evaluated for credit loss $ 8,116 $ 8,136
Fair Value, Nonrecurring [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Charge-Off Rate [Member] | Minimum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Measurement input 0 0
Fair Value, Nonrecurring [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Charge-Off Rate [Member] | Maximum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Measurement input 1 1
Fair Value, Nonrecurring [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Charge-Off Rate [Member] | Weighted Average [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Measurement input 0.1825 0.1822
v3.24.1.1.u2
At March 31, 2024 and December 31, 2023, the carrying values and fair values of financial instruments that are not recorded at fair value in the consolidated financial statements are presented in the table below: (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Interest-bearing time deposits $ 736 $ 979
Accrued interest receivable 4,849 5,362
Interest-bearing deposits 949,546 884,654
Noninterest-bearing deposits 263,954 266,015
Accrued interest payable 2,281 2,358
Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents 16,231 18,377
Interest-bearing time deposits
Restricted equity securities
Loans, net
Accrued interest receivable
Mortgage servicing rights
Interest-bearing deposits
Noninterest-bearing deposits
Short-term borrowings
Long-term borrowings
Accrued interest payable
Fair Value, Inputs, Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents
Interest-bearing time deposits 737 982
Restricted equity securities 8,013 10,394
Loans, net
Accrued interest receivable 4,849 5,362
Mortgage servicing rights
Interest-bearing deposits 613,314 560,521
Noninterest-bearing deposits 263,954 266,015
Short-term borrowings 125,913 252,532
Long-term borrowings
Accrued interest payable 2,281 2,358
Fair Value, Inputs, Level 3 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents
Interest-bearing time deposits
Restricted equity securities
Loans, net 991,967 972,834
Mortgage servicing rights 2,080 2,107
Interest-bearing deposits 334,687 322,913
Noninterest-bearing deposits
Short-term borrowings
Long-term borrowings 63,965 68,887
Accrued interest payable
Reported Value Measurement [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents 16,231 18,377
Interest-bearing time deposits 736 979
Restricted equity securities 8,013 10,394
Loans, net 1,071,396 1,059,127
Accrued interest receivable 4,849 5,362
Mortgage servicing rights 1,961 2,035
Interest-bearing deposits 949,546 884,654
Noninterest-bearing deposits 263,954 266,015
Short-term borrowings 125,913 252,532
Long-term borrowings 65,524 70,448
Accrued interest payable 2,281 2,358
Estimate of Fair Value Measurement [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents 16,231 18,377
Interest-bearing time deposits 737 982
Restricted equity securities 8,013 10,394
Loans, net 991,967 972,834
Accrued interest receivable 4,849 5,362
Mortgage servicing rights 2,080 2,107
Interest-bearing deposits 948,001 883,434
Noninterest-bearing deposits 263,954 266,015
Short-term borrowings 125,913 252,532
Long-term borrowings 63,965 68,887
Accrued interest payable $ 2,281 $ 2,358
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