LOANS AND ALLOWANCE FOR CREDIT LOSSES

12 Months Ended

Dec. 31, 2025

LOANS AND ALLOWANCE FOR CREDIT LOSSES

(4)	LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans at December 31, 2025 and 2024 consisted of the following:


		December 31,			December 31,
(In thousands)		2025			2024

1-4 Family Residential Mortgage		$	140,677		$	138,936
Home Equity and Second Mortgage			71,435			66,549
Multifamily Residential			69,567			36,822
1-4 Family Residential Construction			15,445			15,245
Other Construction, Development and Land			41,227			75,840
Commercial Real Estate			207,124			184,851
Commercial Business			61,991			62,727
Consumer and Other			55,676			58,406
Principal loan balance			663,142			639,376

Deferred loan origination fees and costs, net			1,066			1,104
Allowance for credit losses			(10,108)			(9,281)

Loans, net		$	654,100		$	631,199

The Bank has entered into loan transactions with certain directors, officers and their affiliates (i.e., related parties).

The following table represents the aggregate activity for related party loans during the years ended December 31, 2025 and 2024. Adjustments are made to reflect new directors and officers added during the year, as well as directors and officers that left the Company during the year.


(In thousands)		2025			2024

Beginning balance		$	5,309		$	5,877
Adjustments due to officer and director changes			—			29
New loans			2,056			1,100
Payments			(1,298)			(1,697)

Ending balance		$	6,067		$	5,309

Off-balance-sheet commitments (including commitments to make loans, unused lines of credit and letters of credit) to related parties at December 31, 2025 and 2024 were $2.4 million and $2.1 million, respectively.

The following table provides the components of the Company’s amortized cost basis in loans at December 31, 2025:


														Other
		1-4 Family			Home Equity						1-4 Family			Construction,
		Residential			and Second			Multifamily			Residential			Development			Commercial			Commercial			Consumer
		Mortgage			Mortgage			Residential			Construction			and Land			Real Estate			Business			and Other			Total

		(In thousands)
Amortized Cost Basis in Loans:
Principal loan balance		$	140,677		$	71,435		$	69,567		$	15,445		$	41,227		$	207,124		$	61,991		$	55,676		$	663,142

Net deferred loan origination fees and costs			81			1,231			(45)			—			(49)			(150)			(2)			—			1,066

Amortized cost basis in loans		$	140,758		$	72,666		$	69,522		$	15,445		$	41,178		$	206,974		$	61,989		$	55,676		$	664,208

The following table provides the components of the Company’s amortized cost basis in loans at December 31, 2024:


														Other
		1-4 Family			Home Equity						1-4 Family			Construction,
		Residential			and Second			Multifamily			Residential			Development			Commercial			Commercial			Consumer
		Mortgage			Mortgage			Residential			Construction			and Land			Real Estate			Business			and Other			Total

		(In thousands)
Amortized Cost Basis in Loans:
Principal loan balance		$	138,936		$	66,549		$	36,822		$	15,245		$	75,840		$	184,851		$	62,727		$	58,406		$	639,376

Net deferred loan origination fees and costs			98			1,206			(17)			—			(29)			(145)			(9)			—			1,104

Amortized cost basis in loans		$	139,034		$	67,755		$	36,805		$	15,245		$	75,811		$	184,706		$	62,718		$	58,406		$	640,480

The following table presents the activity in the ACL on loans by class of loan for the year ended December 31, 2025:


														Other
		1-4 Family			Home Equity						1-4 Family			Construction,
		Residential			and Second			Multifamily			Residential			Development			Commercial			Commercial			Consumer
		Mortgage			Mortgage			Residential			Construction			and Land			Real Estate			Business			and Other			Total

		(In thousands)
ACL on Loans:

Beginning balance		$	1,592		$	478		$	545		$	184		$	588		$	2,459		$	2,424		$	1,011		$	9,281
Provision for credit losses			(205)			458			151			29			(152)			784			(124)			203			1,144
Charge-offs			(1)			—			—			—			—			—			(83)			(415)			(499)
Recoveries			7			1			—			—			1			—			35			138			182

Ending balance		$	1,393		$	937		$	696		$	213		$	437		$	3,243		$	2,252		$	937		$	10,108

The following table presents the activity in the ACL on loans by class of loan for the year ended December 31, 2024:


														Other
		1-4 Family			Home Equity						1-4 Family			Construction,
		Residential			and Second			Multifamily			Residential			Development			Commercial			Commercial			Consumer
		Mortgage			Mortgage			Residential			Construction			and Land			Real Estate			Business			and Other			Total

		(In thousands)
ACL on Loans:

Beginning balance		$	1,490		$	406		$	332		$	208		$	804		$	2,119		$	1,431		$	1,215		$	8,005
Provision for credit losses			77			68			213			(24)			(216)			339			991			1			1,449
Charge-offs			(4)			—			—			—			—			—			—			(345)			(349)
Recoveries			29			4			—			—			—			1			2			140			176

Ending balance		$	1,592		$	478		$	545		$	184		$	588		$	2,459		$	2,424		$	1,011		$	9,281

There have been no significant changes to the types of collateral securing the Company’s collateral dependent loans. The following table presents the amortized cost basis of, and ACL allocation to, individually evaluated collateral-dependent loans by class of loans as of December 31, 2025:


		December 31, 2025
		Real									ACL
		Estate		Equipment		Other		Total			Allocation

		(In thousands)
1-4 Family Residential Mortgage		$	1,835	$	—	$	—	$	1,835		$	—
Home Equity and Second Mortgage			503		—		—		503			—
Multifamily Residential			—		—		—		—			—
1-4 Family Residential Construction			97		—		—		97			60
Other Construction, Development and Land			118		—		—		118			—
Commercial Real Estate			2,175		—		—		2,175			—
Commercial Business			—		1,645		467		2,112			1,233
Consumer and Other			—		—		15		15			—
		$	4,728	$	1,645	$	482	$	6,855		$	1,293

The following table presents the amortized cost basis of, and ACL allocation to, individually evaluated collateral-dependent loans by class of loans as of December 31, 2024:


		December 31, 2024
		Real								ACL
		Estate		Equipment		Other		Total		Allocation

		(In thousands)
1-4 Family Residential Mortgage		$	1,613	$	—	$	—	$	1,613	$	—
Home Equity and Second Mortgage			714		—		—		714		—
Multifamily Residential			—		—		—		—		—
1-4 Family Residential Construction			90		—		—		90		54
Other Construction, Development and Land			106		—		—		106		—
Commercial Real Estate			3,912		—		—		3,912		—
Commercial Business			—		1,926		155		2,081		1,233
Consumer and Other			—		—		—		—		—
		$	6,435	$	1,926	$	155	$	8,516	$	1,287

Nonperforming loans consists of nonaccrual loans and loans past due and still accruing interest. The following table presents the amortized cost basis of loans on nonaccrual status and loans 90 days or more past due still accruing as of December 31, 2025:


								Loans 90+ Days			Total
	Nonaccrual Loans		Nonaccrual Loans		Total			Past Due			Nonperforming
	with No ACL		with An ACL		Nonaccrual			Still Accruing			Loans

	(In thousands)
1-4 Family Residential Mortgage	$	1,552	$	—	$	1,552		$	—		$	1,552
Home Equity and Second Mortgage		329		—		329			—			329
Multifamily Residential		—		—		—			—			—
1-4 Family Residential Construction		—		97		97			—			97
Other Construction, Development and Land		72		—		72			—			72
Commercial Real Estate		417		—		417			—			417
Commercial Business		99		1,687		1,786			83			1,869
Consumer and Other		15		—		15			—			15

Total	$	2,484	$	1,784	$	4,268		$	83		$	4,351

The following table presents the amortized cost basis of loans on nonaccrual status and loans 90 days or more past due still accruing as of December 31, 2024:


								Loans 90+ Days			Total
	Nonaccrual Loans		Nonaccrual Loans		Total			Past Due			Nonperforming
	with No ACL		with An ACL		Nonaccrual			Still Accruing			Loans

	(In thousands)
1-4 Family Residential Mortgage	$	1,186	$	—	$	1,186		$	—		$	1,186
Home Equity and Second Mortgage		568		—		568			—			568
Multifamily Residential		—		—		—			—			—
1-4 Family Residential Construction		—		90		90			—			90
Other Construction, Development and Land		59		—		59			—			59
Commercial Real Estate		413		—		413			—			413
Commercial Business		99		1,967		2,066			—			2,066
Consumer and Other		—		—		—			—			—

Total	$	2,325	$	2,057	$	4,382		$	—		$	4,382

No interest income was recognized on nonaccrual loans during the years ended December 31, 2025, 2024 and 2023.

The following table presents the aging of the amortized cost basis in loans at December 31, 2025:


		30-59 Days			60-89 Days			90 Days or More			Total					Total
		Past Due			Past Due			Past Due			Past Due		Current			Loans

		(In thousands)
1-4 Family Residential Mortgage		$	849		$	249		$	1,011		$	2,109	$	138,649		$	140,758
Home Equity and Second Mortgage			668			—			52			720		71,946			72,666
Multifamily Residential			—			—			—			—		69,522			69,522
1-4 Family Residential Construction			—			—			97			97		15,348			15,445
Other Construction, Development and Land			80			—			72			152		41,026			41,178
Commercial Real Estate			827			707			417			1,951		205,023			206,974
Commercial Business			92			19			223			334		61,655			61,989
Consumer and Other			198			86			15			299		55,377			55,676

Total		$	2,714		$	1,061		$	1,887		$	5,662	$	658,546		$	664,208

The following table presents the aging of the amortized cost basis in loans at December 31, 2024:


		30-59 Days			60-89 Days			90 Days or More			Total					Total
		Past Due			Past Due			Past Due			Past Due		Current			Loans

		(In thousands)
1-4 Family Residential Mortgage		$	1,758		$	205		$	828		$	2,791	$	136,243		$	139,034
Home Equity and Second Mortgage			269			202			148			619		67,136			67,755
Multifamily Residential			—			—			—			—		36,805			36,805
1-4 Family Residential Construction			—			—			90			90		15,155			15,245
Other Construction, Development and Land			98			25			59			182		75,629			75,811
Commercial Real Estate			252			1,027			413			1,692		183,014			184,706
Commercial Business			80			25			140			245		62,473			62,718
Consumer and Other			472			54			—			526		57,880			58,406

Total		$	2,929		$	1,538		$	1,678		$	6,145	$	634,335		$	640,480

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, a term extension, an other-than-insignificant payment delay or an interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL on loans. In some cases, the Company may provide multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

There were no modifications to borrowers in financial distress during the year ended December 31, 2025. During the year ended December 31, 2024, the Company modified Commercial Business loans with an amortized cost basis of $2.0 million, or approximately 3% of the amortized cost of all Commercial Business loans, for which the borrowers were experiencing financial distress. The modifications for each loan were the modification of principal and interest payments for 12 months. No principal was forgiven, no payments were delayed, and no interest rates were reduced for the modified loans. All modifications occurred for one borrowing relationship only. The Company monitors the performance of modified loans and none of the modified loans were delinquent at December 31, 2024. There were no loans to borrowers experiencing financial distress that were modified during the previous 12 months and which subsequently defaulted during the years ended December 31, 2025 and 2024. There were no unfunded commitments associated with loans modified for borrowers experiencing financial distress as of December 31, 2025 or 2024.

Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. The Company does not consider modified loans (or potion of a modified loan) uncollectible as of December 31, 2025 or 2024.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, public information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company classifies loans based on credit risk at least quarterly. The Company uses the following regulatory definitions for risk ratings:

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 a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

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

Loss: Loans classified as loss are considered uncollectible and of such little value that their continuance on the institution’s books as an asset is not warranted.

Loans not meeting the criteria above that are analyzed individually as part of the described process are considered to be pass rated loans.

Based on the analysis performed, the risk category of loans by class of loans as of December 31, 2025 and gross write-offs for the year then ended are as follows:


	Term Loans Amortized Cost Basis by Origination Year
	2025			2024			2023			2022			2021			Prior			Revolving			Total

	(In thousands)
1-4 Family Residential Mortgage
Pass	$	25,785		$	18,522		$	24,845		$	22,939		$	19,268		$	26,477		$	—		$	137,836
Special Mention		—			—			20			—			1,008			60			—			1,088
Substandard		—			—			—			—			97			185			—			282
Doubtful		—			177			31			142			120			1,082			—			1,552
	$	25,785		$	18,699		$	24,896		$	23,081		$	20,493		$	27,804		$	—		$	140,758

Current period gross write-offs	$	—		$	—		$	—		$	—		$	—		$	1		$	—		$	1

Home Equity and Second Mortgage
Pass	$	2,066		$	1,428		$	2,835		$	2,649		$	202		$	282		$	62,515		$	71,977
Special Mention		57			—			—			129			—			—			—			186
Substandard		—			—			—			—			—			—			174			174
Doubtful		—			—			—			—			—			329			—			329
	$	2,123		$	1,428		$	2,835		$	2,778		$	202		$	611		$	62,689		$	72,666

Current period gross write-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Multifamily Residential
Pass	$	16,912		$	5,981		$	8,955		$	19,754		$	6,759		$	11,161		$	—		$	69,522
Special Mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			—			—			—
Doubtful		—			—			—			—			—			—			—			—
	$	16,912		$	5,981		$	8,955		$	19,754		$	6,759		$	11,161		$	—		$	69,522

Current period gross write-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

1-4 Family Residential Construction
Pass	$	11,472		$	3,876		$	—		$	—		$	—		$	—		$	—		$	15,348
Special Mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			—			—			—
Doubtful		—			—			—			—			97			—			—			97
	$	11,472		$	3,876		$	—		$	—		$	97		$	—		$	—		$	15,445

Current period gross write-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Other Construction, Development and Land
Pass	$	21,034		$	3,987		$	9,534		$	2,827		$	955		$	2,723		$	—		$	41,060
Special Mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			46			—			46
Doubtful		—			—			—			—			—			72			—			72
	$	21,034		$	3,987		$	9,534		$	2,827		$	955		$	2,841		$	—		$	41,178

Current period gross write-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Commercial Real Estate
Pass	$	18,784		$	26,438		$	19,826		$	55,077		$	24,474		$	54,907		$	4,936		$	204,442
Special Mention		19			—			—			165			—			173			—			357
Substandard		—			306			707			—			541			204			—			1,758
Doubtful		—			—			—			—			—			417			—			417
	$	18,803		$	26,744		$	20,533		$	55,242		$	25,015		$	55,701		$	4,936		$	206,974

Current period gross write-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—


		Term Loans Amortized Cost Basis by Origination Year
		2025			2024			2023			2022			2021			Prior			Revolving			Total

		(In thousands)
Commercial Business
Pass		$	13,738		$	5,223		$	7,136		$	6,426		$	7,138		$	8,141		$	11,738		$	59,540
Special Mention			54			14			160			23			14			—			30			295
Substandard			197			—			—			—			30			—			142			369
Doubtful			—			—			107			1,645			—			33			—			1,785
		$	13,989		$	5,237		$	7,403		$	8,094		$	7,182		$	8,174		$	11,910		$	61,989

Current period gross write-offs		$	—		$	—		$	33		$	50		$	—		$	—		$	—		$	83

Consumer and Other
Pass		$	18,791		$	10,946		$	9,962		$	3,844		$	1,129		$	6,809		$	4,103		$	55,584
Special Mention			—			—			—			3			—			—			—			3
Substandard			—			—			—			—			—			—			74			74
Doubtful			—			15			—			—			—			—			—			15
		$	18,791		$	10,961		$	9,962		$	3,847		$	1,129		$	6,809		$	4,177		$	55,676

Current period gross write-offs		$	12		$	162		$	89		$	34		$	6		$	5		$	107		$	415

Total Loans
Pass		$	128,582		$	76,401		$	83,093		$	113,516		$	59,925		$	110,500		$	83,292		$	655,309
Special Mention			130			14			180			320			1,022			233			30			1,929
Substandard			197			306			707			—			668			435			390			2,703
Doubtful			—			192			138			1,787			217			1,933			—			4,267
		$	128,909		$	76,913		$	84,118		$	115,623		$	61,832		$	113,101		$	83,712		$	664,208

Current period gross write-offs		$	12		$	162		$	122		$	84		$	6		$	6		$	107		$	499

Based on the analysis performed, the risk category of loans by class of loans as of December 31, 2024 for the year then ended are as follows:


		Term Loans Amortized Cost Basis by Origination Year
		2024			2023			2022			2021			2020			Prior			Revolving			Total

		(In thousands)
1-4 Family Residential Mortgage
Pass		$	22,095		$	31,871		$	26,756		$	23,181		$	5,824		$	27,218		$	—		$	136,945
Special Mention			—			31			—			—			—			445			—			476
Substandard			—			—			—			—			—			427			—			427
Doubtful			—			—			41			154			73			918			—			1,186
		$	22,095		$	31,902		$	26,797		$	23,335		$	5,897		$	29,008		$	—		$	139,034

Current period gross write-offs		$	—		$	—		$	—		$	—		$	—		$	4		$	—		$	4

Home Equity and Second Mortgage
Pass		$	2,014		$	3,962		$	3,617		$	353		$	182		$	242		$	56,590		$	66,960
Special Mention			—			—			—			—			—			—			80			80
Substandard			—			—			—			—			—			—			147			147
Doubtful			—			—			—			—			—			568			—			568
		$	2,014		$	3,962		$	3,617		$	353		$	182		$	810		$	56,817		$	67,755

Current period gross write-offs		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Multifamily Residential
Pass		$	964		$	3,534		$	11,820		$	8,505		$	7,663		$	4,319		$	—		$	36,805
Special Mention			—			—			—			—			—			—			—			—
Substandard			—			—			—			—			—			—			—			—
Doubtful			—			—			—			—			—			—			—			—
		$	964		$	3,534		$	11,820		$	8,505		$	7,663		$	4,319		$	—		$	36,805

Current period gross write-offs		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

1-4 Family Residential Construction
Pass		$	12,186		$	1,498		$	642		$	—		$	829		$	—		$	—		$	15,155
Special Mention			—			—			—			—			—			—			—			—
Substandard			—			—			—			—			—			—			—			—
Doubtful			—			—			—			90			—			—			—			90
		$	12,186		$	1,498		$	642		$	90		$	829		$	—		$	—		$	15,245

Current period gross write-offs		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Other Construction, Development and Land
Pass		$	11,687		$	26,093		$	31,645		$	1,823		$	1,443		$	3,014		$	—		$	75,705
Special Mention			—			—			—			—			—			—			—			—
Substandard			—			—			—			—			—			47			—			47
Doubtful			—			—			—			—			—			59			—			59
		$	11,687		$	26,093		$	31,645		$	1,823		$	1,443		$	3,120		$	—		$	75,811

Current period gross write-offs		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Commercial Real Estate
Pass		$	22,024		$	20,478		$	41,583		$	26,748		$	19,760		$	44,237		$	2,129		$	176,959
Special Mention			—			511			3,032			—			—			292			—			3,835
Substandard			311			716			—			557			211			1,704			—			3,499
Doubtful			—			—			—			—			—			413			—			413
		$	22,335		$	21,705		$	44,615		$	27,305		$	19,971		$	46,646		$	2,129		$	184,706

Current period gross write-offs		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—


		Term Loans Amortized Cost Basis by Origination Year
		2024			2023			2022			2021			2020			Prior			Revolving			Total

		(In thousands)
Commercial Business
Pass		$	8,414		$	10,636		$	9,590		$	8,699		$	4,750		$	4,543		$	12,895		$	59,527
Special Mention			486			149			130			126			15			—			162			1,068
Substandard			—			—			—			57			—			—			—			57
Doubtful			—			107			1,926			—			—			33			—			2,066
		$	8,900		$	10,892		$	11,646		$	8,882		$	4,765		$	4,576		$	13,057		$	62,718

Current period gross write-offs		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Consumer and Other
Pass		$	18,932		$	16,555		$	8,274		$	3,574		$	810		$	7,554		$	2,577		$	58,276
Special Mention			—			—			—			—			—			—			—			—
Substandard			—			—			—			—			—			—			130			130
Doubtful			—			—			—			—			—			—			—			—
		$	18,932		$	16,555		$	8,274		$	3,574		$	810		$	7,554		$	2,707		$	58,406

Current period gross write-offs		$	25		$	74		$	131		$	27		$	8		$	3		$	77		$	345

Total Loans
Pass		$	98,316		$	114,627		$	133,927		$	72,883		$	41,261		$	91,127		$	74,191		$	626,332
Special Mention			486			691			3,162			126			15			737			242			5,459
Substandard			311			716			—			614			211			2,178			277			4,307
Doubtful			—			107			1,967			244			73			1,991			—			4,382
		$	99,113		$	116,141		$	139,056		$	73,867		$	41,560		$	96,033		$	74,710		$	640,480

Current period gross write-offs		$	25		$	74		$	131		$	27		$	8		$	7		$	77		$	349

ACL 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 estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. At December 31, 2025 and 2024, the Company’s ACL for unfunded commitments was $131,000. The ACL for off-balance-sheet credit exposures is presented in accrued expenses and other liabilities on the consolidated balance sheets. Changes in the ACL for off-balance-sheet credit exposures are reflected in the provision for credit losses on the consolidated statements of income. There were no changes to the ACL for off-balance-sheet credit exposures during the years ended December 31, 2025 and 2024.