v3.25.2
Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2025
Receivables [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
The ACL is a valuation amount that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. The ACL consists of three elements: (1) specific reserves for loans individually analyzed; (2) general reserves for each portfolio segment; and, (3) qualitative reserves. All outstanding loans are considered in evaluating the appropriateness of the allowance. Loans are segmented by common risk characteristics as delineated in the paragraph below. The Company provides for loan losses through the ACL which represents an estimated reserve for losses in the loan portfolio. To determine an appropriate level for general reserves, a discounted cash flow approach is applied to each portfolio segment implementing a probability of default and loss given default estimate based upon a number of factors including historical losses over an economic cycle, economic forecasts, loan prepayment speeds and curtailment rates. To determine an appropriate level for qualitative reserves, various factors are considered including underwriting policies, credit administration practices, experience, ability and depth of lending management, and economic factors not captured in the general reserve calculation.

Loan Portfolio Composition & Risk Characteristics: The loan portfolio is segmented into eleven classes and credit risk is evaluated separately in each class. Major risk characteristics relevant to each portfolio segment are as follows: 
Commercial Real Estate Owner Occupied - commercial real estate owner occupied loans consist of mortgage loans to finance investments in real property such as retail space, offices, industrial buildings, hotels, educational facilities, and other specific or mixed use properties. Loans are typically written with amortizing payment structures. Collateral values are determined based on appraisals and evaluations in accordance with established policy and regulatory guidelines. Loans typically have a loan-to-value ratio of up to 80% based upon current valuation information at the time the loan is made, and are primarily paid by the cash flow generated from the real property, typically the operating entity of owner occupant. Risk factors typically include competitive market forces, net operating incomes of the operating entity, and overall economic demand. Loans in the recreational and tourism sector can be affected by weather conditions, such as unseasonably low winter snowfalls. Commercial real estate lending also carries a higher degree of environmental risk than other types of lending.
Commercial Real Estate Non-Owner Occupied - commercial real estate loans non-owner occupied share many of the purpose, loan structure and risk characteristics of owner-occupied commercial real estate. The primary differentiating factor from Owner Occupied is that repayment is generally reliant upon cash flow generated from tenants rather than an operating entity. Risk factors are also influenced by vacancy rates, cap rates, lease renewals, and underlying financial health of lessees.
Commercial Construction - commercial construction loans consist of loans to finance construction in a mix of owner- and non-owner occupied commercial real estate properties. Loans typically have construction periods of less than two years, and payment structures during the construction period are typically on an interest only basis, although principal payments may be established depending on the type of construction project being financed. During the construction phase, commercial construction loans are primarily paid by cash flow generated from the construction project or other operating cash flows from the borrower or guarantors, if applicable. Commercial construction loans will typically convert to permanent financing from the Company, or loan repayment may come from a third party source in the event that the Company will not be providing permanent term financing. Collateral valuation and loan-to-value guidelines follow those for commercial real estate loans. Commercial construction loans are impacted by factors similar to those for commercial real estate loans in addition to risks related to contractor financial capacity and ability to complete a project within acceptable time frames and within budget.
Commercial and Industry - C&I loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and or capital investment. C&I loans may be secured or unsecured; when secured, collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, equipment, and/or other tangible and intangible assets. C&I loans are primarily paid by the operating cash flow of the borrower. A weakened economy, soft consumer spending, and the rising cost of labor or raw materials are examples of issues that can impact the credit quality in this segment.
Commercial Multifamily - multifamily loans share structure and risk characteristics with non-owner occupied commercial real estate; underlying collateral is residential in nature rather than commercial, consisting of properties with five or more units.
Municipal Loans - municipal loans are comprised of loans to municipalities in Maine for capitalized expenditures, construction projects, or tax anticipation notes. All municipal loans are considered either general obligations of the municipality collateralized by the taxing ability of the municipality for repayment of debt or have a pledge of specific revenues. The overall health of the economy, including unemployment rates and housing prices, has an impact on the credit quality of this segment.
Agriculture - agriculture loans consist mostly of amortizing term loans and revolving lines of credit made to borrowers in agriculture related industries. For the Company, this includes loans made to land based agricultural production and to participants in the fishing industry. Collateral values are determined based on appraisals and evaluations in accordance with established policy and regulatory guidelines. Loans are primarily paid by the cash flow generated from the agricultural property or operation of equipment. Risk factors typically include competitive market forces, overall economic demand for the product, and may be further influenced by weather conditions which impact growing and/or harvesting, or other factors such as changes in government regulation(s).
Residential Real Estate Term - residential term loans consist of residential real estate loans made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and loan-to-value ratios within established policy and regulatory guidelines. Collateral values are determined based on appraisals and evaluations in accordance with established policy and regulatory guidelines. Residential loans typically have a loan-to-value ratio of up to 80% based on appraisal information at the time the loan is made. Collateral consists of mortgage liens on one-to four-family residential properties. Loans are offered with fixed or adjustable rates with amortization terms of up to thirty years. The overall health of the economy, including unemployment rates and housing prices, has an impact on the credit quality of this segment.
Residential Real Estate Construction - residential construction loans typically consist of loans for the purpose of constructing single family residences to be owned and occupied by the borrower. Borrower qualifications include favorable credit history combined with supportive income requirements and loan-to-value ratios within established policy and regulatory guidelines. Residential construction loans normally have construction terms of one year or less and payment during the construction term is typically on an interest only basis from sources including interest reserves, borrower liquidity, and/or income. Residential construction loans will typically convert to permanent financing from the Company or have another financing commitment in place from an acceptable mortgage lender. Collateral valuation and loan-to-value guidelines are consistent with those for residential term loans. Residential construction loans are impacted by factors similar to those for residential real estate term loans in addition to risks related to contractor financial capacity and ability to complete a project within acceptable time frames and within budget.
Home Equity Revolving and Term - home equity revolving and term loans are made to qualified individuals and are secured by senior or junior mortgage liens on owner occupied one- to four-family homes, condominiums, or vacation homes. The home equity line of credit typically has a variable interest rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Loan maturities are normally 300 months. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios usually not exceeding 80% inclusive of priority liens. Collateral valuation guidelines follow those for residential real estate loans. The overall health of the economy, including unemployment rates and housing prices, has an impact on the credit quality of this segment. 
Consumer - consumer loans include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as autos, recreational vehicles, debt consolidation, personal expenses, or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines. Consumer loans may be secured or unsecured. The overall health of the economy, including unemployment rates, has an impact on the credit quality of this segment.

Construction, land, and land development: CLLD loans, both commercial and residential, represented 28.6% of total Bank capital as of June 30, 2025 and remain below the regulatory guidance of 100.0% of total Bank capital. Construction loans and non-owner-occupied commercial real estate loans represented 218.1% of total Bank capital at June 30, 2025, below the regulatory guidance of 300.0% of total Bank capital.

Composition of the ACL: A breakdown of the ACL as of June 30, 2025, by class of financing receivable and allowance element, is presented in the following table:
As of June 30, 2025Specific Reserves on Loans Evaluated Individually General Reserves on Loans Based on Historical Loss ExperienceReserves for Qualitative FactorsTotal Reserves
Commercial
   Real estate owner occupied$— $4,476,000 $719,000 $5,195,000 
   Real estate non-owner occupied— 4,289,000 645,000 4,934,000 
   Construction— 335,000 101,000 436,000 
   C&I326,000 3,946,000 593,000 4,865,000 
   Multifamily— 1,408,000 164,000 1,572,000 
   Agriculture— 517,000 149,000 666,000 
Municipal— 36,000 231,000 267,000 
Residential
   Term— 5,075,000 410,000 5,485,000 
   Construction— 360,000 55,000 415,000 
Home Equity
   Revolving and term— 741,000 82,000 823,000 
Consumer— 164,000 7,000 171,000 
326,000 21,347,000 3,156,000 24,829,000 
A breakdown of the ACL as of December 31, 2024, by class of financing receivable and allowance element, is presented in the following table:
As of December 31, 2024Specific Reserves on Loans Evaluated IndividuallyGeneral Reserves on Loans Based on Historical Loss ExperienceReserves for Qualitative FactorsTotal Reserves
Commercial
    Real estate owner occupied$— $4,355,000 $690,000 $5,045,000 
    Real estate non-owner occupied— 4,237,000 592,000 4,829,000 
    Construction— 786,000 158,000 944,000 
    C&I1,047,000 3,744,000 573,000 5,364,000 
    Multifamily— 1,108,000 131,000 1,239,000 
    Agriculture— 449,000 156,000 605,000 
Municipal— 35,000 227,000 262,000 
Residential
    Term— 4,811,000 430,000 5,241,000 
    Construction— 414,000 60,000 474,000 
Home Equity
    Revolving and term— 600,000 86,000 686,000 
Consumer— 175,000 7,000 182,000 
$1,047,000 $20,714,000 $3,110,000 $24,871,000 
A breakdown of the ACL as of June 30, 2024, by class of financing receivable and allowance element, is presented in the following table:
As of June 30, 2024Specific Reserves on Loans Evaluated IndividuallyGeneral Reserves on Loans Based on Historical Loss ExperienceReserves for Qualitative FactorsTotal Reserves
Commercial
    Real estate owner occupied$— $4,434,000 $819,000 $5,253,000 
    Real estate non-owner occupied— 3,819,000 429,000 4,248,000 
    Construction— 1,032,000 (110,000)922,000 
    C&I219,000 4,098,000 704,000 5,021,000 
    Multifamily— 1,439,000 128,000 1,567,000 
    Agriculture— 402,000 26,000 428,000 
Municipal— 37,000 143,000 180,000 
Residential
    Term22,000 4,984,000 554,000 5,560,000 
    Construction— 683,000 (96,000)587,000 
Home Equity
    Revolving and term— 644,000 100,000 744,000 
Consumer— 170,000 13,000 183,000 
$241,000 $21,742,000 $2,710,000 $24,693,000 

The ACL as a percent of total loans stood at 1.04% as of June 30, 2025, 1.06% at December 31, 2024 and 1.10% as of June 30, 2024.
Off-Balance Sheet Credit Exposures: In the ordinary course of business, the Company enters into commitments to extend credit, including construction lines of credit, revolving lines of credit, written commitments to provide financing, commercial letters of credit and standby letters of credit. Such financial instruments are recorded as loans when they are funded.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures: The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL on off-balance sheet credit exposures is adjusted through credit loss expense and any adjustment is recognized in net income. To appropriately measure expected credit losses, management disaggregates the loan portfolio into similar risk characteristics, identical to those determined for the loan portfolio. An estimated funding rate is then applied to the qualifying unfunded loan commitments and letters of credit using the Company’s own historical experience to estimate the expected funded amount for each loan segment as of the reporting date. Once the expected funded amount for each loan segment is determined, the loss rate, which is the calculated expected loan loss as a percent of the amortized cost basis for each loan segment, is applied to calculate the ACL on off-balance sheet credit exposures as of the reporting date. The Company’s ACL on unfunded commitments is recognized as a liability, included within other liabilities on the consolidated balance sheet.

The following table presents the activity in the ACL for off-balance sheet credit exposures for the six months and quarters ended June 30, 2025 and 2024:
For the six months ended June 30,For the quarter ended June 30,
2025202420252024
Allowance for credit losses:
Beginning balance$714,000 $1,255,000 $709,000 $895,000 
Credit loss expense (reduction)132,000 (353,000)137,000 7,000 
Total ending allowance balance$846,000 $902,000 $846,000 $902,000 
Credit Quality Indicators: To monitor the credit quality of its loan portfolio, management applies an internal risk rating system to categorize commercial loan segments. Approximately 60% of commercial loan outstanding balances are subject to review and validation annually by an independent consulting firm. Additionally, commercial loan relationships with exposure greater than or equal to $1,000,000 are subject to review annually by the Company's internal credit review function.

The risk rating system has eight levels, defined as follows:
1    Strong
Credits rated "1" are characterized by borrowers fully responsible for the credit with excellent capacity to pay principal and interest. Loans rated "1" may be secured with acceptable forms of liquid collateral.
2    Above Average
Credits rated "2" are characterized by borrowers that have better than average liquidity, capitalization, earnings, and/or cash flow with a consistent record of solid financial performance.
3    Satisfactory
Credits rated "3" are characterized by borrowers with favorable liquidity, profitability, and financial condition with adequate cash flow to pay debt service.
4    Average
Credits rated "4" are characterized by borrowers that present risk more than 1, 2 and 3 rated loans and merit an ordinary level of ongoing monitoring. Financial condition is on par or somewhat below industry averages while cash flow is generally adequate to meet debt service requirements.
5    Watch
Credits rated "5" are characterized by borrowers that warrant greater monitoring due to financial condition or unresolved and identified risk factors.
6    Other Assets Especially Mentioned
Loans in this category are currently protected but are potentially weak and constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of substandard. OAEM have potential weaknesses which may, if not checked or corrected, weaken the asset or inadequately protect the Company's credit position at some future date.
7    Substandard
Loans in this category are inadequately protected by the paying capacity of the borrower or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Substandard loans are characterized by the distinct possibility that the Company may sustain some loss if the deficiencies are not corrected.
8    Doubtful
Loans classified "Doubtful" have the same weaknesses as those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is high, but because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.

Most residential real estate, home equity, and consumer loans are not assigned ratings; therefore they are categorized as performing and non-performing loans. Performing loans include loans that are current and loans that are past due less than 90 days. Loans that are past due more than 90 days are considered non-performing.
The following table summarizes the credit quality for the Company's portfolio by risk category of loans and by class by vintage as of June 30, 2025:
Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands20252024202320222021PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal
As of June 30, 2025
Commercial
  Real estate owner occupied
    Pass (risk rating 1-5)$32,552 $47,207 $63,949 $67,078 $34,061 $100,153 $11,748 $960 $357,708 
    Special Mention (risk rating 6)135 — 3,026 1,989 — 1,601 134 — 6,885 
    Substandard (risk rating 7)— 80 247 5,322 257 833 — — 6,739 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Real Estate Owner Occupied32,687 47,287 67,222 74,389 34,318 102,587 11,882 960 371,332 
    Current period gross write-offs— — — — — — — — — 
  Real estate non-owner occupied
    Pass (risk rating 1-5)35,181 30,331 43,369 71,213 100,381 128,787 13,485 — 422,747 
    Special Mention (risk rating 6)— — — — 43 199 — — 242 
    Substandard (risk rating 7)1,285 213 62 — — 61 — — 1,621 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Real Estate Non-Owner Occupied36,466 30,544 43,431 71,213 100,424 129,047 13,485 — 424,610 
    Current period gross write-offs— — — — — — — — — 
  Construction
    Pass (risk rating 1-5)11,423 26,707 4,468 3,198 3,991 3,128 — — 52,915 
    Special Mention (risk rating 6)— — — — — — — — — 
    Substandard (risk rating 7)— 95 — — 67 — — — 162 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Construction11,423 26,802 4,468 3,198 4,058 3,128 — — 53,077 
    Current period gross write-offs— — — — — — — — — 
  C&I
    Pass (risk rating 1-5)32,765 73,646 48,847 40,994 37,266 33,925 109,122 945 377,510 
    Special Mention (risk rating 6)— 25 309 296 461 71 839 — 2,001 
    Substandard (risk rating 7)244 — 684 238 36 274 189 — 1,665 
    Doubtful (risk rating 8)— — — — — 258 — — 258 
  Total C&I33,009 73,671 49,840 41,528 37,763 34,528 110,150 945 381,434 
    Current period gross write-offs— (47)(571)— — (136)— — (754)
  Multifamily
    Pass (risk rating 1-5)5,901 17,019 11,884 52,855 18,867 24,341 1,071 — 131,938 
    Special Mention (risk rating 6)160 — 1,600 — — — — — 1,760 
    Substandard (risk rating 7)— — — 1,020 1,325 908 — — 3,253 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Multifamily6,061 17,019 13,484 53,875 20,192 25,249 1,071 — 136,951 
    Current period gross write-offs— — — — — — — — — 
  Agriculture
    Pass (risk rating 1-5)5,507 10,721 2,278 4,939 3,663 18,146 4,149 222 49,625 
    Special Mention (risk rating 6)132 — 450 — 52 134 600 — 1,368 
    Substandard (risk rating 7)1,325 — 254 211 27 121 — — 1,938 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Agriculture6,964 10,721 2,982 5,150 3,742 18,401 4,749 222 52,931 
    Current period gross write-offs— — — — — — — — — 
Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands20252024202320222021PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal
As of June 30, 2025
Municipal
    Pass (risk rating 1-5)8,834 9,981 18,726 3,897 4,136 17,350 — — 62,924 
    Special Mention (risk rating 6)— — — — — — — — — 
    Substandard (risk rating 7)— — — — — — — — — 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Municipal8,834 9,981 18,726 3,897 4,136 17,350 — — 62,924 
    Current period gross write-offs— — — — — — — — — 
Residential
  Term
    Performing28,887 68,438 90,906 146,470 123,293 260,426 2,598 119 721,137 
    Non-performing— 166 53 412 682 1,880 — — 3,193 
  Total Term28,887 68,604 90,959 146,882 123,975 262,306 2,598 119 724,330 
    Current period gross write-offs— — — — — (1)— — (1)
  Construction
    Performing9,716 18,095 3,214 554 — — — — 31,579 
    Non-performing— — — — — — — — — 
  Total Construction9,716 18,095 3,214 554 — — — — 31,579 
    Current period gross write-offs— — — — — — — — — 
Home Equity Revolving and Term
    Performing4,339 11,830 8,921 7,893 1,842 2,591 87,402 8,909 133,727 
    Non-performing— 114 16 85 — 90 88 160 553 
  Total Home Equity Revolving and Term4,339 11,944 8,937 7,978 1,842 2,681 87,490 9,069 134,280 
    Current period gross write-offs— — — — — — — — — 
Consumer
    Performing1,532 2,307 1,864 923 263 5,404 8,266 — 20,559 
    Non-performing— — — — — — — — — 
  Total Consumer1,532 2,307 1,864 923 263 5,404 8,266 — 20,559 
    Current period gross write-offs(1)(23)(22)(12)(5)(56)— — (119)
Total loans$179,918 $316,975 $305,127 $409,587 $330,713 $600,681 $239,691 $11,315 $2,394,007 
The following table summarizes the credit quality for the Company's portfolio by risk category of loans and by class by vintage as of December 31, 2024:
Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands20242023202220212020PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal
As of December 31, 2024
Commercial
  Real estate owner occupied
    Pass (risk rating 1-5)$47,724 $62,376 $77,469 $39,635 $26,448 $81,529 $10,727 $1,126 $347,034 
    Special Mention (risk rating 6)125 3,026 5,334 — 195 1,603 50 — 10,333 
    Substandard (risk rating 7)41 261 — 257 160 502 — — 1,221 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Real Estate Owner Occupied47,890 65,663 82,803 39,892 26,803 83,634 10,777 1,126 358,588 
    Current period gross write-offs— — — — — — — — — 
  Real estate non-owner occupied
    Pass (risk rating 1-5)33,083 29,546 72,025 113,630 45,421 96,778 11,241 1,520 403,244 
    Special Mention (risk rating 6)— 62 — 44 — 199 — — 305 
    Substandard (risk rating 7)289 — — — — 61 — — 350 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Real Estate Non-Owner Occupied33,372 29,608 72,025 113,674 45,421 97,038 11,241 1,520 403,899 
    Current period gross write-offs— — — — — — — — — 
  Construction
    Pass (risk rating 1-5)36,478 22,629 26,650 7,826 1,356 2,314 — — 97,253 
    Special Mention (risk rating 6)— — 2,007 44 — 199 — — 2,250 
    Substandard (risk rating 7)145 — — 69 — — — — 214 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Construction36,623 22,629 28,657 7,939 1,356 2,513 — — 99,717 
    Current period gross write-offs— — — — — — — — — 
  C&I
    Pass (risk rating 1-5)69,543 50,204 45,986 39,217 14,958 25,284 114,567 778 360,537 
    Special Mention (risk rating 6)25 15 561 478 723 — 900 — 2,702 
    Substandard (risk rating 7)473 1,227 356 30 15 19 200 — 2,320 
    Doubtful (risk rating 8)— — — — — 258 — — 258 
  Total C&I70,041 51,446 46,903 39,725 15,696 25,561 115,667 778 365,817 
    Current period gross write-offs— (128)(39)(72)(47)(165)— — (451)
  Multifamily
    Pass (risk rating 1-5)14,048 13,102 33,558 17,335 14,483 12,152 781 — 105,459 
    Special Mention (risk rating 6)— — — — — — — — — 
    Substandard (risk rating 7)— — 1,020 1,341 912 — — — 3,273 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Multifamily14,048 13,102 34,578 18,676 15,395 12,152 781 — 108,732 
    Current period gross write-offs— — — — — — — — — 
  Agriculture
    Pass (risk rating 1-5)11,694 2,749 5,790 3,835 14,651 6,023 4,546 215 49,503 
    Special Mention (risk rating 6)— 474 — 52 — 152 600 — 1,278 
    Substandard (risk rating 7)— 75 731 30 — 602 — — 1,438 
    Doubtful (risk rating 8)—————————
  Total Agriculture11,694 3,298 6,521 3,917 14,651 6,777 5,146 215 52,219 
    Current period gross write-offs— — — — — — — — — 
Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands20242023202220212020PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal
As of December 31, 2024
Municipal
    Pass (risk rating 1-5)9,503 18,642 4,017 3,822 8,498 17,345 — — 61,827 
    Special Mention (risk rating 6)— — — — — — — — — 
    Substandard (risk rating 7)— — — — — — — — — 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Municipal9,503 18,642 4,017 3,822 8,498 17,345 — — 61,827 
    Current period gross write-offs— — — — — — — — — 
Residential
  Term
    Performing56,378 94,816 148,877 130,413 84,028 192,466 2,109 121 709,208 
    Non-performing— — 297 257 380 665 — — 1,599 
  Total Term56,378 94,816 149,174 130,670 84,408 193,131 2,109 121 710,807 
    Current period gross write-offs— — — — — (37)— — (37)
  Construction
    Performing26,386 7,487 925 — 683 — — — 35,481 
    Non-performing— — — — — — — — — 
  Total Construction26,386 7,487 925 — 683 — — — 35,481 
    Current period gross write-offs— — — — — — — — — 
Home Equity Revolving and Term
    Performing12,449 8,917 8,310 1,894 1,021 1,857 79,132 9,192 122,772 
    Non-performing— — — — — 96 15 180 291 
  Total Home Equity Revolving and Term12,449 8,917 8,310 1,894 1,021 1,953 79,147 9,372 123,063 
    Current period gross write-offs— — — — — (7)— — (7)
Consumer
    Performing3,146 2,438 1,218 734 1,114 5,805 6,335 — 20,790 
    Non-performing— — — — — — — — — 
  Total Consumer3,146 2,438 1,218 734 1,114 5,805 6,335 — 20,790 
    Current period gross write-offs(13)(53)(72)(39)(20)(55)— — (252)
Total loans$321,530 $318,046 $435,131 $360,943 $215,046 $445,909 $231,203 $13,132 $2,340,940 
The following table summarizes the credit quality for the Company's portfolio by risk category of loans and by class by vintage as of June 30, 2024:
Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands20242023202220212020PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal
As of June 30, 2024
Commercial
  Real estate owner occupied
    Pass (risk rating 1-5)$25,788 $66,261 $75,715 $40,225 $27,932 $83,905 $11,946 $— $331,772 
    Special Mention (risk rating 6)— 1,903 — — — 6,352 50 — 8,305 
    Substandard (risk rating 7)— 283 — — 164 519 — — 966 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Real Estate Owner Occupied25,788 68,447 75,715 40,225 28,096 90,776 11,996 — 341,043 
    Current period gross write-offs— — — — — — — — — 
  Real estate non-owner occupied
    Pass (risk rating 1-5)18,753 30,722 75,841 117,684 47,167 105,808 10,458 — 406,433 
    Special Mention (risk rating 6)— — — 47 — — — — 47 
    Substandard (risk rating 7)— — — — — — — — — 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Real Estate Non-Owner Occupied18,753 30,722 75,841 117,731 47,167 105,808 10,458 — 406,480 
    Current period gross write-offs— — — — — — — — — 
  Construction
    Pass (risk rating 1-5)14,735 32,272 39,063 8,191 1,451 2,800 — — 98,512 
    Special Mention (risk rating 6)— — — — — — — — — 
    Substandard (risk rating 7)145 — — 69 — — — — 214 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Construction14,880 32,272 39,063 8,260 1,451 2,800 — — 98,726 
    Current period gross write-offs— — — — — — — — — 
  C&I
    Pass (risk rating 1-5)22,262 38,700 50,381 43,544 16,725 27,893 97,746 4,400 301,651 
    Special Mention (risk rating 6)— 23,316 512 502 458 3,012 450 — 28,250 
    Substandard (risk rating 7)— — 352 103 18 31 137 — 641 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total C&I22,262 62,016 51,245 44,149 17,201 30,936 98,333 4,400 330,542 
    Current period gross write-offs— — — — — — — — — 
  Multifamily
    Pass (risk rating 1-5)9,538 12,291 34,230 17,581 14,771 13,196 816 — 102,423 
    Special Mention (risk rating 6)— — — — — — — — — 
    Substandard (risk rating 7)— — 1,020 1,349 912 — — — 3,281 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Multifamily9,538 12,291 35,250 18,930 15,683 13,196 816 — 105,704 
    Current period gross write-offs— — — — — — — — — 
  Agriculture
    Pass (risk rating 1-5)5,725 2,992 6,804 4,234 15,283 7,369 4,438 231 47,076 
    Special Mention (risk rating 6)21 500 — 61 — 211 600 — 1,393 
    Substandard (risk rating 7)— 87 — 32 — 160 — — 279 
    Doubtful (risk rating 8)—————————
  Total Agriculture5,7463,5796,8044,32715,2837,7405,03823148,748
    Current period gross write-offs— — — — — — — — — 
Term Loans Amortized Cost Basis by Origination Year
Dollars in thousands20242023202220212020PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal
As of June 30, 2024
Municipal
    Pass (risk rating 1-5)7,505 20,704 4,608 4,254 9,370 15,664 — — 62,105 
    Special Mention (risk rating 6)— — — — — — — — — 
    Substandard (risk rating 7)— — — — — — — — — 
    Doubtful (risk rating 8)— — — — — — — — — 
  Total Municipal7,505 20,704 4,608 4,254 9,370 15,664 — — 62,105 
    Current period gross write-offs— — — — — — — — — 
Residential
  Term
    Performing22,303 73,148 155,571 136,033 90,033 204,072 2,991 124 684,275 
    Non-performing— — 303 266 403 759 — — 1,731 
  Total Term22,303 73,148 155,874 136,299 90,436 204,831 2,991 124 686,006 
    Current period gross write-offs— — — — — (36)— — (36)
  Construction
    Performing6,821 26,326 1,088 — 1,339 — — — 35,574 
    Non-performing— — — — — — — — — 
  Total Construction6,821 26,326 1,088 — 1,339 — — — 35,574 
    Current period gross write-offs— — — — — — — — — 
Home Equity Revolving and Term
    Performing5,153 9,781 8,652 1,976 1,157 2,090 72,582 10,549 111,940 
    Non-performing— — — — — 100 18 170 288 
  Total Home Equity Revolving and Term5,153 9,781 8,652 1,976 1,157 2,190 72,600 10,719 112,228 
    Current period gross write-offs— — — — — (7)— — (7)
Consumer
    Performing1,984 2,979 1,575 919 1,441 4,660 6,956 — 20,514 
    Non-performing— — — — — — — — — 
  Total Consumer1,984 2,979 1,575 919 1,441 4,660 6,956 — 20,514 
    Current period gross write-offs(2)(22)(57)(30)(5)(32)— — (148)
Total loans$140,733 $342,265 $455,715 $377,070 $228,624 $478,601 $209,188 $15,474 $2,247,670 
Loss Recognition: Commercial loans are generally charged off when all or a portion of the principal amount is determined to be uncollectible. This determination is based on circumstances specific to a borrower including repayment ability, analysis of collateral, and other factors as applicable. Consumer loans greater than 120 days past due are generally charged off. Residential loans 90 days or more past due are placed on non-accrual status unless the loans are both well secured and in the process of collection. One- to  four-family residential real estate loans and home equity loans are written down or charged-off no later than 180 days past due, or for residential real estate secured loans having a borrower in bankruptcy, within 60 days of receipt of notification of filing from the bankruptcy court, whichever is sooner. This is subject to completion of a current assessment of the value of the collateral with any outstanding loan balance in excess of the fair value of the property, less costs to sell, written down or charged-off.
The following table presents ACL activity by class for the six months and quarter ended June 30, 2025:
Dollars in thousandsCommercialMunicipalResidentialHome EquityConsumerTotal
Real Estate Owner OccupiedReal Estate Non-Owner OccupiedConstructionC&IMultifamilyAgricultureTermConstructionRevolving and term
For the six months ended June 30, 2025
Beginning balance$5,045 $4,829 $944 $5,364 $1,239 $605 $262 $5,241 $474 $686 $182 $24,871 
Charge offs— — — (754)— — — (1)— — (119)(874)
Recoveries— — — 28 — — — 4 — 12 44 88 
Credit loss expense (reduction) 150 105 (508)227 333 61 5 241 (59)125 64 744 
Ending balance$5,195 $4,934 $436 $4,865 $1,572 $666 $267 $5,485 $415 $823 $171 $24,829 
For the three months ended June 30, 2025
Beginning balance$5,189 $4,870 $619 $5,499 $1,455 $587 $235 $5,260 $465 $751 $184 $25,114 
Charge offs— — — (608)— — — — — — (58)(666)
Recoveries— — — 2 — — — 2 — 10 19 33 
Credit loss expense (reduction)6 64 (183)(28)117 79 32 223 (50)62 26 348 
Ending balance$5,195 $4,934 $436 $4,865 $1,572 $666 $267 $5,485 $415 $823 $171 $24,829 
The following table presents ACL activity by class for the year ended December 31, 2024:
Dollars in thousandsCommercialMunicipalResidentialHome Equity ConsumerTotal
Real Estate Owner OccupiedReal Estate Non-Owner OccupiedConstructionC&IMultifamilyAgricultureTermConstructionRevolving and term
For the year ended December 31, 2024
Beginning balance$4,633 $4,285 $1,978 $5,001 $1,318 $— $334 $4,991 $618 $626 $246 $24,030 
Charge offs— — — (451)— — — (37)— (7)(252)(747)
Recoveries100 — — 25 — — — 32 — 24 103 284 
Credit loss expense (reduction) 312 544 (1,034)789 (79)605 (72)255 (144)43 85 1,304 
Ending balance$5,045 $4,829 $944 $5,364 $1,239 $605 $262 $5,241 $474 $686 $182 $24,871 
The following table presents ACL activity by class for the six months and quarter ended June 30, 2024:
Dollars in thousandsCommercialMunicipalResidential Home EquityConsumerTotal
Real Estate Owner OccupiedReal Estate Non-Owner OccupiedConstructionC&IMultifamilyAgricultureTermConstructionRevolving and term
For the six months ended June 30, 2024
Beginning balance$4,633 $4,285 $1,978 $5,001 $1,318 $— $334 $4,991 $618 $626 $246 $24,030 
Charge offs— — — — — — — (36)— (7)(148)(191)
Recoveries100 — — 23 — — — 29 — 18 46 216 
Credit loss expense (reduction)520 (37)(1,056)(3)249 428 (154)576 (31)107 39 638 
Ending balance$5,253 $4,248 $922 $5,021 $1,567 $428 $180 $5,560 $587 $744 $183 $24,693 
For the three months ended June 30, 2024
Beginning balance$5,180 $4,265 $820 $5,083 $1,507 $392 $194 $5,354 $562 $677 $173 $24,207 
Charge offs— — — — — — — (36)— (7)(52)(95)
Recoveries— — — — — — — 4 — 15 23 42 
Credit loss expense (reduction) 73 (17)102 (62)60 36 (14)238 25 59 39 539 
Ending balance$5,253 $4,248 $922 $5,021 $1,567 $428 $180 $5,560 $587 $744 $183 $24,693 

As of June 30, 2025, the significant model inputs and assumptions used within the discounted cash flow model for purposes of estimating the ACL on loans were:

Macroeconomic loss drivers: The following loss drivers for each loan segment were used to calculate the expected probability of default over the forecast and reversion period:

•Commercial Real Estate Owner Occupied: FOMC median forecasts of national unemployment and change in national real GDP
•Commercial Real Estate Non-Owner Occupied: FOMC median forecasts of national unemployment and change in national real GDP
•Commercial Construction: FOMC median forecasts of national unemployment and change in national real GDP
•Commercial & Industrial: FOMC median forecasts of national unemployment and change in national real GDP
•Commercial Multifamily: FOMC median forecast of national unemployment
•Commercial Agriculture: FOMC median forecasts of national unemployment and change in national real GDP
•Municipal: Probability of default is measured based upon an index supplied by a nationally recognized ratings agency
•Residential Real Estate Term: FOMC median forecasts of national unemployment and change in national real GDP
•Residential Real Estate Construction: FOMC median forecast of national unemployment and change in national real GDP
•Home Equity Revolving & Term: FOMC median forecasts of national unemployment and change in national real GDP
•Consumer: FOMC median forecasts of national unemployment and change in national real GDP

Reasonable and supportable forecast period: The ACL on loans estimate used a reasonable and supportable forecast period of one year.
Reversion period: The ACL on loans estimate used a reversion period of one year.
Prepayment speeds: The estimate of prepayment speed for each loan segment was derived using internally sourced prepayment data.
Qualitative factors: The ACL on loans estimate incorporated various qualitative factors into the calculation such as changes in lending policies, changes in the nature and volume and terms of loans, changes in the experience, depth and ability of lending management, and economic factors not captured in the quantitative model.