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EX-13 · Modifications to Borrowers Experiencing Financial Difficulty:

Modifications to Borrowers Experiencing Financial Difficulty:

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

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

Note C – Loans and Allowance for Credit Losses (continued)

The following table presents the activity in the ACL by portfolio segment for the years ended December 31, 2023 and 2022:

December 31, 2023Residential Real EstateCommercial Real EstateCommercial & IndustrialConsumerTotal
Allowance for credit losses:
Beginning balance$681$2,038$1,293$1,257$5,269
Impact of adopting ASC 3261,345162(116)7712,162
Provision for credit losses251824(85)1,0402,030
Loans charged off(121)(132)(29)(1,410)(1,692)
Recoveries57155212574998
Total ending allowance balance$2,213$3,047$1,275$2,232$8,767
December 31, 2022Residential Real EstateCommercial Real EstateCommercial & IndustrialConsumerTotal
Allowance for credit losses:
Beginning balance$980$2,548$1,571$1,384$6,483
Provision for credit losses(318)(556)283559(32)
Loans charged off(135)(36)(618)(1,399)(2,188)
Recoveries15482577131,006
Total ending allowance balance$681$2,038$1,293$1,257$5,269

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

December 31, 2022Residential Real EstateCommercial Real EstateCommercial & IndustrialConsumerTotal
Allowance for credit losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment$—$—$—$—$—
Collectively evaluated for impairment6812,0381,2931,2575,269
Total ending allowance balance$681$2,038$1,293$1,257$5,269
Loans:
Loans individually evaluated for impairment$—$1,986$—$28$2,014
Loans collectively evaluated for impairment297,036286,769151,232147,998883,035
Total ending loans balance$297,036$288,755$151,232$148,026$885,049

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

Collateral Type
December 31, 2023Real EstateBusiness AssetsTotal
Residential real estate$1,663$—$1,663
Commercial real estate:
Owner-occupied700258958
Consumer:
Home equity27—27
Total collateral dependent loans$2,390$258$2,648

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

December 31, 2022Unpaid Principal BalanceRecorded InvestmentAllowance for Loan Losses AllocatedAverage Impaired LoansInterest Income RecognizedCash Basis Interest Recognized
With an allowance recorded:$—$—$—$—$—$—
With no related allowance recorded:
Commercial real estate:
Owner-occupied1,6921,607—1,6629797
Nonowner-occupied379379—3822929
Consumer:
Home equity2828—2322
Total$2,099$2,014$—$2,067$128$128

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

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

The Company transfers loans to other real estate owned, at fair value less cost to sell, in the period the Company obtains physical possession of the property (through legal title or through a deed in lieu). As of December 31, 2023, the Company had $68 in other real estate owned for residential real estate properties compared tonone at December 31, 2022. In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $348 and $370 as of December 31, 2023 and 2022, respectively.

Note D - Premises and Equipment

Following is a summary of premises and equipment at December 31:

20232022
Land$2,568$2,486
Buildings23,86722,526
Leasehold improvements1,5551,509
Furniture and equipment11,13710,410
39,12736,931
Less accumulated depreciation17,67716,495
Total premises and equipment$21,450$20,436

Following is a summary of premises and equipment held for sale at December 31:

20232022
Land$84$84
Buildings594594
678678
Less accumulated depreciation10585
Total premises and equipment held for sale$573$593

Note E – Leases

Balance sheet information related to leases at December 31 was as follows:

20232022
Operating leases:
Operating lease right-of-use assets$1,205$1,294
Operating lease liabilities1,2051,294

The components of lease cost were as follows for the year ending December 31:

20232022
Operating lease cost$204$185
Short-term lease expense1735

Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2023 are as follows:

Operating Leases
2024$195
2025195
2026140
2027109
2028111
Thereafter764
Total lease payments1,514
Less: Imputed Interest(309)
Total operating leases$1,205

Other information at December 31 was as follows:

20232022
Weighted-average remaining lease term for operating leases13.0 years12.1 years
Weighted-average discount rate for operating leases2.91%2.70%

Note F – Goodwill and Intangible Assets

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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.