LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables)

3 Months Ended

Mar. 31, 2024

LOANS AND ALLOWANCE FOR CREDIT LOSSES [Abstract]

The composition of the Company’s loan portfolio, by loan class, as of March 31, 2024 and December 31, 2023 was as follows:

($ in thousands)	March 31, 2024			December 31, 2023

Commercial	$	108,786		$	106,897
Commercial Real Estate		726,069			721,729
Agriculture		91,865			105,838
Residential Mortgage		108,553			107,328
Residential Construction		11,981			12,323
Consumer		16,087			14,868
		1,063,341			1,068,983
Allowance for credit losses		(16,246	)		(16,596	)
Net deferred origination fees and costs		201			78
Loans, net	$	1,047,296		$	1,052,465

Activity in ACL on Loans by Loan Class

The following tables summarize the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities as of March 31, 2024 and March 31, 2023.

	Allowance for Credit Losses - Three months ended March 31, 2024
($ in thousands)	Beginning balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance
Commercial	$	2,041	$	(130	)	$	41	$	(405	)	$	1,547
Commercial Real Estate		10,864		—			—		(368	)		10,496
Agriculture		997		—			—		644			1,641
Residential Mortgage		2,005		—			—		(104	)		1,901
Residential Construction		334		—			—		27			361
Consumer		355		(13	)		2		(44	)		300
Allowance for credit losses on loans		16,596		(143	)		43		(250	)		16,246
Reserve for unfunded commitments		1,150		—			—		(50	)		1,100
Total	$	17,746	$	(143	)	$	43	$	(300	)	$	17,346

	Allowance for Credit Losses – Three months ended March 31, 2023
($ in thousands)	Beginning balance		Adoption of CECL			Charge-offs			Recoveries		Provision (Recovery)			Ending Balance
Commercial	$	1,491	$	689		$	(127	)	$	23	$	(173	)	$	1,903
Commercial Real Estate		10,259		(513	)		—			—		211			9,957
Agriculture		1,789		(742	)		—			—		(98	)		949
Residential Mortgage		896		923			(3	)		—		9			1,825
Residential Construction		181		221			—			—		51			453
Consumer		176		222			(1	)		—		—			397
Allowance for credit losses on loans		14,792		800			(131	)		23		—			15,484
Reserve for unfunded commitments		700		500			—			—		—			1,200
Total	$	15,492	$	1,300		$	(131	)	$	23	$	—		$	16,684

Amortized Cost of Collateral Dependent Loans by Class

The following table presents the amortized cost basis of collateral-dependent loans by class, which are individually evaluated to determine expected credit losses as of March 31, 2024 and December 31, 2023:

March 31, 2024
($ in thousands)	Secured by 1-4 Family Residential Properties- 1st lien		Secured by 1-4 Family Residential Properties- junior lien		Secured by 1-4 Family Residential Properties- revolving		Commercial		Construction and land development		Secured by farmland		Agriculture production loans		Total
Commercial	$	—	$	—	$	—	$	139	$	—	$	—	$	—	$	139
Commercial Real Estate		—		—		—		—		—		—		—		—
Agriculture		—		—		—		—		—		899		1,829		2,728
Residential Mortgage		1,315		—		—		—		—		—		—		1,315
Residential Construction		—		—		—		—		4,000		—		—		4,000
Consumer		—		335		267		—		—		—		—		602
Total	$	1,315	$	335	$	267	$	139	$	4,000	$	899	$	1,829	$	8,784

December 31, 2023
($ in thousands)	Secured by 1-4 Family Residential Properties- 1st lien		Secured by 1-4 Family Residential Properties- junior lien		Secured by 1-4 Family Residential Properties- revolving		Commercial		Construction and land development		Secured by farmland		Agriculture production loans		Total
Commercial	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial Real Estate		—		—		—		—		—		—		—		—
Agriculture		—		—		—		—		—		946		1,925		2,871
Residential Mortgage		424		—		—		—		—		—		—		424
Residential Construction		—		—		—		—		—		—		—		—
Consumer		—		351		352		—		—		—		—		703
Total	$	424	$	351	$	352	$	—	$	—	$	946	$	1,925	$	3,998

Loans by Delinquency and Non-Accrual Status

The Company’s loans by delinquency and non-accrual status, as of March 31, 2024 and December 31, 2023, was as follows:

($ in thousands)	30-59 days Past Due & Accruing		60-89 days Past Due & Accruing		90 days or More Past Due & Accruing		Nonaccrual Loans		Total Past Due & Nonaccrual Loans		Current & Accruing Loans		Total Loans		Nonaccrual loans with No ACL
March 31, 2024
Commercial	$	1,032	$	50	$	—	$	139	$	1,221	$	107,565	$	108,786	$	139
Commercial Real Estate		—		—		—		—		—		726,069		726,069		—
Agriculture		922		—		—		2,728		3,650		88,215		91,865		2,728
Residential Mortgage		386		—		—		1,315		1,701		106,852		108,553		1,315
Residential Construction		—		—		—		4,000		4,000		7,981		11,981		4,000
Consumer		—		—		—		602		602		15,485		16,087		602
Total	$	2,340	$	50	$	—	$	8,784	$	11,174	$	1,052,167	$	1,063,341	$	8,784

December 31, 2023
Commercial	$	91	$	178	$	—	$	—	$	269	$	106,628	$	106,897	$	—
Commercial Real Estate		—		—		—		—		—		721,729		721,729		—
Agriculture		—		—		—		2,871		2,871		102,967		105,838		2,871
Residential Mortgage		976		—		916		424		2,316		105,012		107,328		424
Residential Construction		—		—		3,420		—		3,420		8,903		12,323		—
Consumer		194		—		—		703		897		13,971		14,868		703
Total	$	1,261	$	178	$	4,336	$	3,998	$	9,773	$	1,059,210	$	1,068,983	$	3,998

Amortized Cost Basis of Loans Modification to Borrowers Experiencing Financial Difficulty and Financial Effects of Loan Modifications

The following tables present the amortized cost basis of loans that were both experiencing financial difficulty and modified during the periods ended March 31, 2024 and March 31, 2023 by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.

($ in thousands)	Term Extension		Combination Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
March 31, 2024
Commercial	$	2,718	$	—		2.50	%
Commercial Real Estate		—		—		—
Agriculture		—		—		—
Residential Mortgage		—		—		—
Residential Construction		—		—		—
Consumer		—		—		—
Total	$	2,718	$	—		0.26	%

($ in thousands)	Term Extension		Combination Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
March 31, 2023
Commercial	$	250	$	50		0.29	%
Commercial Real Estate		—		—		—
Agriculture		—		—		—
Residential Mortgage		—		—		—
Residential Construction		—		—		—
Consumer		—		—		—
Total	$	250	$	50		0.03	%

The following tables present the financial effect of the loan modifications to borrowers experiencing financial difficulty for the three-month periods ended March 31, 2024 and March 31, 2023:

($ in thousands)	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (in months)
March 31, 2024
Commercial		—	$	8
Commercial Real Estate		—		—
Agriculture		—		—
Residential Mortgage		—		—
Residential Construction		—		—
Consumer		—		—
Total		—	$	8

($ in thousands)	Weighted-Average Interest Rate Reduction			Weighted-Average Term Extension (in months)
March 31, 2023
Commercial		0.50	%	$	9
Commercial Real Estate		—			—
Agriculture		—			—
Residential Mortgage		—			—
Residential Construction		—			—
Consumer		—			—
Total		0.50	%	$	9

Risk Ratings by Loan Class

The following tables present the loan portfolio by loan class, origination year, and internal risk rating as of March 31, 2024 and December 31, 2023. Generally, existing term loans that were re-underwritten are reflected in the table in the year of renewal. Lines of credit that have a conversion feature at the time of origination, such as construction to permanent loans, are presented by year of origination. Revolving loans converted to term loans totaled $630,000 and $881,000 as of March 31, 2024 and December 31, 2023, respectively.

(in thousands)
	Term Loans Amortized Cost Basis by Origination Year - As of March 31, 2024
	2024		2023			2022			2021		2020			Prior			Revolving Loans Amortized Cost Basis		Total
Commercial
Pass	$	13,255	$	17,078		$	15,223		$	14,713	$	4,972		$	12,759		$	21,639	$	99,639
Special Mention		—		—			2,348			2,771		212			289			1,790		7,410
Substandard		927		—			—			—		521			—			289		1,737
Doubtful/Loss		—		—			—			—		—			—			—		—
Total Commercial loans	$	14,182	$	17,078		$	17,571		$	17,484	$	5,705		$	13,048		$	23,718	$	108,786
Current Period Write-offs		—		(40	)		(75	)		—		(13	)		(2	)		—		(130	)
Current Period Recoveries		—		—			—			—		—			41			—		41
Current Period Net Write-offs		—		(40	)		(75	)		—		(13	)		39			—		(89	)

Commercial Real Estate
Pass	$	24,352	$	107,222		$	174,355		$	189,466	$	44,174		$	159,555		$	6,785	$	705,909
Special Mention		—		—			—			2,175		—			1,254			—		3,429
Substandard		—		392			—			7,119		1,673			7,547			—		16,731
Doubtful/Loss		—		—			—			—		—			—			—		—
Total Commercial Real Estate loans	$	24,352	$	107,614		$	174,355		$	198,760	$	45,847		$	168,356		$	6,785	$	726,069
Current Period Write-offs		—		—			—			—		—			—			—		—
Current Period Recoveries		—		—			—			—		—			—			—		—
Current Period Net Write-offs		—		—			—			—		—			—			—		—

Agriculture
Pass	$	2,484	$	7,051		$	16,881		$	20,433	$	6,707			15,645		$	14,940	$	84,141
Special Mention		—		—			1,891			2,996		—			—			—		4,887
Substandard		—		—			—			899		—			—			1,938		2,837
Doubtful/Loss		—		—			—			—		—			—			—		—
Total Agriculture loans	$	2,484	$	7,051		$	18,772		$	24,328	$	6,707		$	15,645		$	16,878	$	91,865
Current Period Write-offs		—		—			—			—		—			—			—		—
Current Period Recoveries		—		—			—			—		—			—			—		—
Current Period Net Write-offs		—		—			—			—		—			—			—		—

(in thousands)
	Term Loans Amortized Cost Basis by Origination Year – As of March 31, 2024
	2024			2023			2022			2021		2020			Prior			Revolving Loans Amortized Cost Basis		Total
Residential Mortgage
Pass	$	1,312		$	20,536		$	23,824		$	27,975	$	13,966		$	19,625		$	—	$	107,238
Special Mention		—			—			—			—		—			—			—		—
Substandard		—			—			—			37		—			1,278			—		1,315
Doubtful/Loss		—			—			—			—		—			—			—		—
Total Residential Mortgage loans	$	1,312		$	20,536		$	23,824		$	28,012	$	13,966		$	20,903		$	—	$	108,553
Current Period Write-offs		—			—			—			—		—			—			—		—
Current Period Recoveries		—			—			—			—		—			—			—		—
Current Period Net Write-offs		—			—			—			—		—			—			—		—

Residential Construction
Pass	$	575		$	3,998		$	2,073		$	1,335	$	—		$	—		$	—	$	7,981
Special Mention		—			—			—			—		—			—			—		—
Substandard		4,000			—			—			—		—			—			—		4,000
Doubtful/Loss		—			—			—			—		—			—			—		—
Total Residential Construction loans	$	4,575		$	3,998		$	2,073		$	1,335	$	—		$	—		$	—	$	11,981
Current Period Write-offs		—			—			—			—		—			—			—		—
Current Period Recoveries		—			—			—			—		—			—			—		—
Current Period Net Write-offs		—			—			—			—		—			—			—		—

Consumer
Pass	$	207		$	186		$	1,173		$	131	$	131		$	310		$	13,347	$	15,485
Special Mention		—			—			—			—		—			—			—		—
Substandard		—			—			—			—		—			—			602		602
Doubtful/Loss		—			—			—			—		—			—			—		—
Total Consumer loans	$	207		$	186		$	1,173		$	131	$	131		$	310		$	13,949	$	16,087
Current Period Write-offs		(13	)		—			—			—		—			—			—		(13	)
Current Period Recoveries		—			—			—			—		—			2			—		2
Current Period Net Write-offs		(13	)		—			—			—		—			2			—		(11	)

Total Loans
Pass	$	42,185		$	156,071		$	233,529		$	254,053	$	69,950		$	207,894		$	56,711	$	1,020,393
Special Mention		—			—			4,239			7,942		212			1,543			1,790		15,726
Substandard		4,927			392			—			8,055		2,194			8,825			2,829		27,222
Doubtful/Loss		—			—			—			—		—			—			—		—
Total Loans	$	47,112		$	156,463		$	237,768		$	270,050	$	72,356		$	218,262		$	61,330	$	1,063,341
Current Period Write-offs	$	(13	)	$	(40	)	$	(75	)	$	—	$	(13	)	$	(2	)	$	—	$	(143	)
Current Period Recoveries	$	—		$	—		$	—		$	—	$	—		$	43		$	—	$	43
Current Period Net Write-offs	$	(13	)	$	(40	)	$	(75	)	$	—	$	(13	)	$	41		$	—	$	(100	)

(in thousands)
	Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2023
	2023			2022			2021			2020		2019			Prior		Revolving Loans Amortized Cost Basis			Total
Commercial
Pass	$	19,776		$	16,961		$	15,833		$	5,381	$	7,420		$	6,298	$	26,183		$	97,852
Special Mention		—			1,122			2,530			235		308			—		2,936			7,131
Substandard		—			32			1,152			542		—			—		188			1,914
Doubtful/Loss		—			—			—			—		—			—		—			—
Total Commercial loans	$	19,776		$	18,115		$	19,515		$	6,158	$	7,728		$	6,298	$	29,307		$	106,897
Current Period Write-offs		(47	)		(196	)		(36	)		—		(87	)		—		—			(366	)
Current Period Recoveries		—			—			—			—		87			148		—			235
Current Period Net Write-offs		(47	)		(196	)		(36	)		—		—			148		—			(131	)

Commercial Real Estate
Pass	$	115,807		$	173,918		$	191,907		$	50,150	$	52,157		$	107,909	$	6,879		$	698,727
Special Mention		—			—			7,448			—		2,869			1,273		—			11,590
Substandard		395			—			1,712			1,684		6,604			1,017		—			11,412
Doubtful/Loss		—			—			—			—		—			—		—			—
Total Commercial Real Estate loans	$	116,202		$	173,918		$	201,067		$	51,834	$	61,630		$	110,199	$	6,879		$	721,729
Current Period Write-offs		—			—			—			—		—			—		—			—
Current Period Recoveries		—			—			—			—		—			—		—			—
Current Period Net Write-offs		—			—			—			—		—			—		—			—

Agriculture
Pass	$	6,842		$	16,985		$	20,511		$	8,792	$	2,509			11,437	$	29,893		$	96,969
Special Mention		—			1,937			2,996			—		—			1,064		—			5,997
Substandard		—			—			946			—		1,926			—		—			2,872
Doubtful/Loss		—			—			—			—		—			—		—			—
Total Agriculture loans	$	6,842		$	18,922		$	24,453		$	8,792	$	4,435		$	12,501	$	29,893		$	105,838
Current Period Write-offs		(1,825	)		—			—			—		—			—		(742	)		(2,567	)
Current Period Recoveries		1,825			—			—			—		—			—		742			2,567
Current Period Net Write-offs		—			—			—			—		—			—		—			—

(in thousands)
	Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2023
	2023			2022			2021			2020		2019			Prior			Revolving Loans Amortized Cost Basis			Total
Residential Mortgage
Pass	$	20,239		$	24,906		$	26,429		$	14,500	$	5,481		$	15,349		$	—		$	106,904
Special Mention		—			—			—			—		—			—			—			—
Substandard		—			—			39			—		—			385			—			424
Doubtful/Loss		—			—			—			—		—			—			—			—
Total Residential Mortgage loans	$	20,239		$	24,906		$	26,468		$	14,500	$	5,481		$	15,734		$	—		$	107,328
Current Period Write-offs		—			—			—			—		—			(3	)		—			(3	)
Current Period Recoveries		—			—			—			—		—			—			—			—
Current Period Net Write-offs		—			—			—			—		—			(3	)		—			(3	)

Residential Construction
Pass	$	3,714		$	1,991		$	3,198		$	—	$	—		$	—		$	—		$	8,903
Special Mention		—			—			—			—		—			—			—			—
Substandard		—			3,420			—			—		—			—			—			3,420
Doubtful/Loss		—			—			—			—		—			—			—			—
Total Residential Construction loans	$	3,714		$	5,411		$	3,198		$	—	$	—		$	—		$	—		$	12,323
Current Period Write-offs		—			—			—			—		—			—			—			—
Current Period Recoveries		—			—			—			—		—			—			—			—
Current Period Net Write-offs		—			—			—			—		—			—			—			—

Consumer
Pass	$	350		$	758		$	133		$	149	$	70		$	273		$	12,516		$	14,249
Special Mention		—			—			—			—		—			—			—			—
Substandard		—			—			—			—		—			—			619			619
Doubtful/Loss		—			—			—			—		—			—			—			—
Total Consumer loans	$	350		$	758		$	133		$	149	$	70		$	273		$	13,135		$	14,868
Current Period Write-offs		(13	)		—			—			—		—			—			—			(13	)
Current Period Recoveries		—			—			—			—		—			1			—			1
Current Period Net Write-offs		(13	)		—			—			—		—			1			—			(12	)

Total Loans
Pass	$	166,728		$	235,519		$	258,011		$	78,972	$	67,637		$	141,266		$	75,471		$	1,023,604
Special Mention		—			3,059			12,974			235		3,177			2,337			2,936			24,718
Substandard		395			3,452			3,849			2,226		8,530			1,402			807			20,661
Doubtful/Loss		—			—			—			—		—			—			—			—
Total Loans	$	167,123		$	242,030		$	274,834		$	81,433	$	79,344		$	145,005		$	79,214		$	1,068,983
Current Period Write-offs	$	(1,885	)	$	(196	)	$	(36	)	$	—	$	(87	)	$	(3	)	$	(742	)	$	(2,949	)
Current Period Recoveries	$	1,825		$	—		$	—		$	—	$	87		$	149		$	742		$	2,803
Current Period Net Write-offs	$	(60	)	$	(196	)	$	(36	)	$	—	$	—		$	146		$	—		$	(146	)