Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2026

Loans and Allowance for Credit Losses

Loans and Allowance for Credit Losses

4.Loans and Allowance for Credit Losses

Loans at June 30, 2026 and December 31, 2025 consisted of the following:


		June 30,			December 31,
(In thousands)		2026			2025

1-4 Family Residential Mortgage		$	144,710		$	140,677
Home Equity and Second Mortgage			76,155			71,435
Multifamily Residential			57,258			69,567
1-4 Family Residential Construction			15,926			15,445
Other Construction, Development and Land			50,187			41,227
Commercial Real Estate			212,549			207,124
Commercial Business			66,149			61,991
Consumer and Other			54,871			55,676
Principal loan balance			677,805			663,142

Deferred loan origination fees and costs, net			1,033			1,066
Allowance for credit losses			(10,714)			(10,108)

Loans, net		$	668,124		$	654,100

The Allowance for Credit Losses (“ACL”) on loans is measured on a collective (pooled) basis when similar risk characteristics exist. The Company’s pools/segments are largely determined based on loan types as defined by Call Report instructions.

Loans that do not share risk characteristics are evaluated on an individual basis. In addition, loans evaluated individually are not included in the collective evaluation. When management determines that foreclosure is probable or the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date adjusted for selling costs.

The following table provides the components of the Company’s amortized cost basis in loans at June 30, 2026 and 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

June 30, 2026		(In thousands)
Amortized Cost Basis in Loans:
Principal loan balance		$	144,710		$	76,155		$	57,258		$	15,926		$	50,187		$	212,549		$	66,149		$	54,871		$	677,805

Net deferred loan origination fees and costs			67			1,218			(46)			—			(54)			(146)			(6)			—			1,033

Amortized cost basis in loans		$	144,777		$	77,373		$	57,212		$	15,926		$	50,133		$	212,403		$	66,143		$	54,871		$	678,838

December 31, 2025
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

(4 – continued)

The following table provides an analysis of the changes in the ACL on loans for the three months ended June 30, 2026 and 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

June 30, 2026		(In thousands)
ACL on Loans:

Beginning balance		$	1,548		$	959		$	818		$	233		$	548		$	2,552		$	2,620		$	1,069		$	10,347
Provision for credit losses			28			23			(102)			10			28			655			(185)			(32)			425
Charge-offs			—			—			—			—			—			—			(3)			(100)			(103)
Recoveries			—			—			—			—			—			—			8			37			45

Ending balance		$	1,576		$	982		$	716		$	243		$	576		$	3,207		$	2,440		$	974		$	10,714

June 30, 2025
ACL on Loans:

Beginning balance		$	1,438		$	567		$	431		$	223		$	1,179		$	2,328		$	2,337		$	1,032		$	9,535
Provision for credit losses			69			201			32			24			(484)			704			(122)			(118)			306
Charge-offs			—			—			—			—			—			—			(56)			(111)			(167)
Recoveries			4			—			—			—			—			—			21			29			54

Ending balance		$	1,511		$	768		$	463		$	247		$	695		$	3,032		$	2,180		$	832		$	9,728

The following table provides an analysis of the changes in the ACL on loans for the six months ended June 30, 2026 and 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

June 30, 2026		(In thousands)
ACL on Loans:

Beginning balance		$	1,393		$	937		$	696		$	213		$	437		$	3,243		$	2,252		$	937		$	10,108
Provision for credit losses			184			45			20			30			139			(36)			236			157			775
Charge-offs			(1)			—			—			—			—			—			(67)			(255)			(323)
Recoveries			—			—			—			—			—			—			19			135			154

Ending balance		$	1,576		$	982		$	716		$	243		$	576		$	3,207		$	2,440		$	974		$	10,714

June 30, 2025
ACL on Loans:

Beginning balance		$	1,592		$	478		$	545		$	184		$	588		$	2,459		$	2,424		$	1,011		$	9,281
Provision for credit losses			(88)			290			(82)			63			107			573			(183)			(36)			644
Charge-offs			—			—			—			—			—			—			(83)			(211)			(294)
Recoveries			7			—			—			—			—			—			22			68			97

Ending balance		$	1,511		$	768		$	463		$	247		$	695		$	3,032		$	2,180		$	832		$	9,728

Accrued interest on loans totaled $2.4 million and $2.5 million at June 30, 2026 and December 31, 2025, respectively, and is included in accrued interest receivable on the consolidated balance sheets and is excluded from the estimate of credit losses.

The Company utilizes the Weighted Average Remaining Maturity (“WARM”) method in determining expected future credit losses. The WARM method uses average annual charge-off rates and the remaining life of the loan to estimate the ACL. For the Company’s loan portfolios, the remaining contractual life for each loan is adjusted by the expected scheduled payments and estimated prepayments. The average annual charge-off rate is applied to the amortization adjusted remaining life of the loan to determine the unadjusted lifetime historical charge-off rate. The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look-back periods for the loan portfolio range from one to 10 years depending on the WARM of the given portfolio segment and are updated on an annual basis.

(4 – continued)

The Company estimates the ACL on loans using relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. Reasonable and supportable forecasts typically utilize a 12-month period with immediate reversion to historical losses. Historical loss experience provides the basis for the estimation of expected credit losses. Qualitative adjustments to historical loss information are made for losses reflected by peers, changes in underwriting standards, changes in economic conditions, changes in delinquency levels, collateral values and other factors.

Qualitative adjustments reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration industry and collateral concentrations, acquired loan portfolio characteristics and other credit-related analytics as deemed appropriate.

Management exercises significant judgment in evaluating the relevant historical loss experience and the qualitative factors. Management also monitors the differences between estimated and actual incurred loan losses in order to evaluate the effectiveness of the estimation process and make any changes in the methodology as necessary.

Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. 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 June 30, 2026 and December 31, 2025:


		Real												ACL
		Estate			Equipment			Other			Total			Allocation

June 30, 2026		(In thousands)
1-4 Family Residential Mortgage		$	1,722		$	—		$	—		$	1,722		$	—
Home Equity and Second Mortgage			453			—			—			453			—
Multifamily Residential			—			—			—			—			—
1-4 Family Residential Construction			98			—			—			98			61
Other Construction, Development and Land			127			—			—			127			—
Commercial Real Estate			3,143			—			—			3,143			548
Commercial Business			—			1,460			137			1,597			1,233
Consumer and Other			—			—			3			3			—
		$	5,543		$	1,460		$	140		$	7,143		$	1,842

December 31, 2025
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

(4 – continued)

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 June 30, 2026 and 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

June 30, 2026		(In thousands)
1-4 Family Residential Mortgage		$	1,462		$	—		$	1,462		$	—		$	1,462
Home Equity and Second Mortgage			280			—			280			—			280
Multifamily Residential			—			—			—			—			—
1-4 Family Residential Construction			—			98			98			—			98
Other Construction, Development and Land			73			—			73			—			73
Commercial Real Estate			419			988			1,407			—			1,407
Commercial Business			99			1,501			1,600			—			1,600
Consumer and Other			—			—			—			—			—

Total		$	2,333		$	2,587		$	4,920		$	—		$	4,920

December 31, 2025
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

No interest income was recognized on nonaccrual loans during the three and six months ended June 30, 2026 and 2025.

The following table presents the aging of the amortized cost basis in loans at June 30, 2026 and 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

June 30, 2026		(In thousands)
1-4 Family Residential Mortgage		$	2,239		$	305		$	1,074		$	3,618		$	141,159		$	144,777
Home Equity and Second Mortgage			485			—			—			485			76,888			77,373
Multifamily Residential			—			—			—			—			57,212			57,212
1-4 Family Residential Construction			—			—			98			98			15,828			15,926
Other Construction, Development and Land			81			54			73			208			49,925			50,133
Commercial Real Estate			630			170			419			1,219			211,184			212,403
Commercial Business			56			105			140			301			65,842			66,143
Consumer and Other			315			140			—			455			54,416			54,871

Total		$	3,806		$	774		$	1,804		$	6,384		$	672,454		$	678,838

December 31, 2025
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

(4 – continued)

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.

During the three and six months ended June 30, 2026 and 2025, there were no modifications to borrowers in financial distress. The Company monitors the performance of modified loans and no modified loans were delinquent at June 30, 2026 or December 31, 2025. There were no loans to borrowers experiencing financial distress that were modified during the previous 12 months and which subsequently defaulted during the three and six months ended June 30, 2026 and 2025. There were no unfunded commitments associated with loans modified for borrowers experiencing financial distress as of June 30, 2026 and December 31, 2025.

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.

(4 – continued)

The following table provides the risk category of loans by class of loans based on the analysis performed at June 30, 2026:


		Term Loans Amortized Cost Basis by Origination Year
		2026			2025			2024			2023			2022			Prior			Revolving			Total

		(In thousands)
1-4 Family Residential Mortgage
Pass		$	16,196		$	24,249		$	16,088		$	21,426		$	22,070		$	41,775		$	—		$	141,804
Special Mention			364			—			—			—			—			888			—			1,252
Substandard			—			—			—			—			—			260			—			260
Doubtful			13			—			186			30			28			1,204			—			1,461
		$	16,573		$	24,249		$	16,274		$	21,456		$	22,098		$	44,127		$	—		$	144,777

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

Home Equity and Second Mortgage
Pass		$	1,111		$	2,013		$	1,168		$	2,514		$	2,392		$	377		$	67,239		$	76,814
Special Mention			—			—			—			—			—			—			106			106
Substandard			—			—			—			—			—			—			173			173
Doubtful			—			—			—			—			—			280			—			280
		$	1,111		$	2,013		$	1,168		$	2,514		$	2,392		$	657		$	67,518		$	77,373

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

Multifamily Residential
Pass		$	2,708		$	16,890		$	950		$	7,445		$	13,297		$	14,489		$	—		$	55,779
Special Mention			—			—			—			1,433			—			—			—			1,433
Substandard			—			—			—			—			—			—			—			—
Doubtful			—			—			—			—			—			—			—			—
		$	2,708		$	16,890		$	950		$	8,878		$	13,297		$	14,489		$	—		$	57,212

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

1-4 Family Residential Construction
Pass		$	3,913		$	10,423		$	1,340		$	—		$	—		$	—		$	—		$	15,676
Special Mention			152			—			—			—			—			—			—			152
Substandard			—			—			—			—			—			—			—			—
Doubtful			—			—			—			—			—			98			—			98
		$	4,065		$	10,423		$	1,340		$	—		$	—		$	98		$	—		$	15,926

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

Other Construction, Development and Land
Pass		$	4,749		$	24,125		$	8,311		$	6,822		$	2,637		$	3,362		$	—		$	50,006
Special Mention			—			—			—			—			—			—			—			—
Substandard			—			—			—			—			—			54			—			54
Doubtful			—			—			—			—			—			73			—			73
		$	4,749		$	24,125		$	8,311		$	6,822		$	2,637		$	3,489		$	—		$	50,133

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

Commercial Real Estate
Pass		$	12,357		$	20,240		$	26,415		$	19,097		$	52,697		$	73,219		$	4,537		$	208,562
Special Mention			—			—			—			—			161			170			368			699
Substandard			—			—			303			699			—			733			—			1,735
Doubtful			—			—			—			—			—			1,407			—			1,407
		$	12,357		$	20,240		$	26,718		$	19,796		$	52,858		$	75,529		$	4,905		$	212,403

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

(4 – continued)


		Term Loans Amortized Cost Basis by Origination Year
		2026			2025			2024			2023			2022			Prior			Revolving			Total

		(In thousands)
Commercial Business
Pass		$	9,761		$	11,745		$	4,535		$	5,917		$	5,287		$	12,819		$	13,892		$	63,956
Special Mention			295			13			6			—			18			—			216			548
Substandard			—			—			—			—			—			17			22			39
Doubtful			—			—			—			107			1,460			33			—			1,600
		$	10,056		$	11,758		$	4,541		$	6,024		$	6,765		$	12,869		$	14,130		$	66,143

Current period gross write-offs		$	—		$	—		$	45		$	—		$	22		$	—		$	—		$	67

Consumer and Other
Pass		$	12,951		$	14,470		$	8,191		$	7,337		$	2,400		$	6,802		$	2,560		$	54,711
Special Mention			—			—			—			—			—			—			—			—
Substandard			—			—			—			—			3			—			157			160
Doubtful			—			—			—			—			—			—			—			—
		$	12,951		$	14,470		$	8,191		$	7,337		$	2,403		$	6,802		$	2,717		$	54,871

Current period gross write-offs		$	—		$	94		$	50		$	49		$	12		$	6		$	44		$	255

Total Loans
Pass		$	63,746		$	124,155		$	66,998		$	70,558		$	100,780		$	152,843		$	88,228		$	667,308
Special Mention			811			13			6			1,433			179			1,058			690			4,190
Substandard			—			—			303			699			3			1,064			352			2,421
Doubtful			13			—			186			137			1,488			3,095			—			4,919
		$	64,570		$	124,168		$	67,493		$	72,827		$	102,450		$	158,060		$	89,270		$	678,838

Current period gross write-offs		$	—		$	94		$	96		$	49		$	34		$	6		$	44		$	323

The following table provides the risk category of loans by class of loans based on the analysis performed at December 31, 2025:


		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

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

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

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

(4 – continued)


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

		(In thousands)
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

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

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

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

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

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. The ACL for off-balance-sheet credit exposures was $131,000 at both June 30, 2026 and December 31, 2025. 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 three and six months ended June 30, 2026 and 2025.