Allowance for Credit Losses

3 Months Ended

Mar. 31, 2024

Allowance for Credit Loss [Abstract]

Allowance for Credit Losses

5.ALLOWANCE FOR CREDIT LOSSES

The segments of the Company’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. The loan segments used are consistent with the internal reports evaluated by the Company’s management and Board of Directors to monitor risk and performance within various segments of its loan portfolio and, therefore, no further disaggregation is considered necessary. The Company’s loan portfolio consists primarily of real estate loans on commercial and residential property. The portfolio also includes agricultural loans, commercial loans, municipal loans, and consumer loans.

The Company’s primary lending activity is the origination of commercial loans extended to small and mid-sized commercial and industrial entities.

Commercial loans are primarily underwritten on the basis of the borrowers’ ability to service such debt from income. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. As a general practice, the Company takes as collateral a security interest in any equipment, or other chattel, although loans may also be made on an unsecured basis. Collateralized working capital loans typically are secured by short-term assets whereas long-term loans are primarily secured by long-term assets.

Construction and Land loans are to finance the construction of owner-occupied and income producing properties. These loans are categorized within commercial or one-to-four family residential loans based upon the underlying collateral and intended use following the completion of the construction period. Real estate development and construction loans are approved based on an analysis of the borrower and guarantor, the viability of the project and on an acceptable percentage of the appraised value of the property securing the loan. Construction loan funds are disbursed periodically based on the percentage of construction or development completed. The Company carefully monitors these loans with on-site inspections and requires the receipt of lien

waivers on funds advanced. The Company considers the market conditions and feasibility of proposed projects, the financial condition and reputation of the borrower and guarantors, the amount of the borrower’s equity in the project, independent appraisals, cost estimates and pre-construction sale information. The Company also makes loans on occasion for the purchase of land for future development by the borrower. Land loans are extended for the future development for either commercial or residential use by the borrower. The Company carefully analyzes the intended use of the property and the viability thereof.

The Company’s commercial real estate loans consist of mortgage loans secured by nonresidential real estate, such as by apartment buildings, small office buildings, and owner-occupied properties. Commercial real estate loans are secured by the subject property and are underwritten based on loan to value limits, cash flow coverage and general creditworthiness of the obligors. These loans tend to involve larger loan balances and their repayment is typically dependent upon the successful operation and management of the underlying real estate.

Residential real estate loans are underwritten based on the borrower’s repayment capacity and source, value of the underlying property, credit history and stability. These loans are secured by a first or second mortgage on the borrower’s principal residence or their second/vacation home (excluding investment/rental property).

In addition to the main types of loans discussed above, the Company also originates agricultural loans, consumer loans, and municipal loans. The agricultural loan portfolio consists of loans to local farmers and agricultural businesses that are generally secured by farmland and equipment. The consumer loan portfolio consists of lending in the form of home equity loans secured by financed property and personal consumer loans, which may be secured or unsecured. The municipal loan portfolio consists of loans to qualified local municipalities, which are generally supported by the taxing authority of the borrowing municipality, and is frequently secured by collateral.

Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. For segments determined by discounted cash flow analysis, the Company's estimate of future economic conditions utilized in its estimate is primarily dependent on the Federal Open Market Committee's forecasts related to Real Gross Domestic Product and Unemployment rate. For segments determined by the remaining life method, an average loss rate is generally calculated based on peer losses and applied to the future outstanding loan balances at quarter end.

Certain qualitative factors are then added to the historical allocation percentage to get the adjusted factor to be applied to non-classified loans. The following qualitative factors are analyzed for each portfolio segment:

•Levels of and trends in delinquencies

•Trends in volume and terms

•Changes in collateral

•Changes in management and lending staff

•Economic trends

•Concentrations of credit

•Changes in lending policies

•External factors

•Changes in underwriting process

•Trends in credit quality ratings

These qualitative factors are reviewed each quarter and adjusted based upon relevant changes within the portfolio.

The total allowance reflects management’s estimate of credit losses inherent in the loan portfolio at the Consolidated Balance Sheet date. The Company considers the allowance for credit losses adequate to cover loan losses inherent in the loan portfolio at March 31, 2024 and December 31, 2023.

Accrued interest receivable on loans totaled $9.1 million at March 31, 2024 and was reported within accrued interest receivable and other assets on the consolidated balance sheets and is excluded from the estimate of credit losses.

The following tables summarize the activity in the allowance for credit losses by loan segment for the three months ended March 31, 2024 and 2023.

	Beginning balance		Charge-offs			Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Three Months Ended March 31, 2024
Allowance for credit losses:
Agriculture and farmland	$	12	$	—		$	—	$	—		$	12
Construction		959		—			1		563			1,523
Commercial & industrial		2,940		(6	)		2		26			2,962
Commercial real estate
Multifamily		1,483		—			—		109			1,592
Owner occupied		6,572		(6	)		—		(828	)		5,738
Non-owner occupied		5,773		(54	)		—		380			6,099
Residential real estate
First liens		4,778		—			8		(111	)		4,675
Second liens and lines of credit		1,072		—			6		(7	)		1,071
Municipal		79		—			—		(11	)		68
Consumer		99		(22	)		1		24			102
Total	$	23,767	$	(88	)	$	18	$	145		$	23,842
	Beginning balance, prior to adoption of ASC 326		Impact of adopting ASC 326			Charge-offs		Recoveries			Provision for credit losses			Ending balance
(In Thousands)	For the Three Months Ended March 31, 2023
Allowance for credit losses:
Agriculture and farmland	$	279	$	(190	)	$	—	$	—		$	119		$	208
Construction		274		513			—		—			26			813
Commercial & industrial		583		283			—		—			64			930
Commercial real estate
Multifamily		480		340			—		—			(90	)		730
Owner occupied		635		760			—		—			198			1,593
Non-owner occupied		1,116		3,195			—		—			4			4,315
Residential real estate
First liens		1,029		635			—		1			(157	)		1,508
Second liens and lines of credit		218		140			—		1			43			402
Municipal		12		(2	)		—		—			(3	)		7
Consumer		40		(19	)		—		—			(1	)		20
Total	$	4,666	$	5,655		$	—	$	2		$	203		$	10,526

The following table presents the amortized cost basis of nonaccrual loans and loans past due 90 days or greater and still accruing by segments of the loan portfolio:

	As of March 31, 2024
(In Thousands)	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with a related Allowance for Credit Loss		Total Nonaccrual		Loans 90 days or greater past due still accruing
Agriculture and farmland	$	—	$	—	$	—	$	—
Construction		—		—		—		91
Commercial & industrial		6		—		6		80
Commercial real estate
Multifamily		—		—		—		—
Owner occupied		2,631		—		2,631		—
Non-owner occupied		352		—		352		—
Residential real estate
First liens		2,620		—		2,620		605
Second liens and lines of credit		289		—		289		—
Municipal		—		—		—		—
Consumer		—		—		—		—
Total	$	5,898	$	—	$	5,898	$	776
	As of December 31, 2023
(In Thousands)	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with a related Allowance for Credit Loss		Total Nonaccrual		Loans 90 days or greater past due still accruing
Agriculture and farmland	$	—	$	—	$	—	$	—
Construction		191		—		191		—
Commercial & industrial		53		8		61		58
Commercial real estate
Multifamily		—		—		—		—
Owner occupied		2,465		83		2,548		6
Non-owner occupied		948		281		1,229		—
Residential real estate
First liens		2,346		361		2,707		149
Second liens and lines of credit		294		—		294		—
Municipal		—		—		—		—
Consumer		7		—		7		—
Total	$	6,304	$	733	$	7,037	$	213

The Company recognized $28 and $14 of interest income on nonaccrual loans during the three months ended March 31, 2024 and 2023, respectively.

The following tables present, by class of loans, the carrying value of collateral dependent nonaccrual loans and type of collateral as of March 31, 2024 and December 31, 2023.

	March 31, 2024
(In Thousands)	Real Estate		Business Assets		Other		Total
Agriculture and farmland loans	$	—	$	—	$	—	$	—
Construction		—		—		—		—
Commercial & industrial loans		—		6		—		6
Commercial real estate loans
Multifamily		—		—		—		—
Owner occupied		2,631		—		—		2,631
Non-owner occupied		352		—		—		352
Residential real estate loans
First liens		2,620		—		—		2,620
Second liens and lines of credit		289		—		—		289
Municipal		—		—		—		—
Consumer		—		—		—		—
	$	5,892	$	6	$	-	$	5,898
	December 31, 2023
(In Thousands)	Real Estate		Business Assets		Other		Total
Agriculture and farmland loans	$	—	$	—	$	—	$	—
Construction		191		—		—		191
Commercial & industrial loans		—		61		—		61
Commercial real estate loans
Multifamily		—		—		—		—
Owner occupied		2,548		—		—		2,548
Non-owner occupied		1,229		—		—		1,229
Residential real estate loans
First liens		2,707		—		—		2,707
Second liens and lines of credit		294		—		—		294
Municipal		—		—		—		—
Consumer		—		—		7		7
	$	6,969	$	61	$	7	$	7,037

The following tables present an aging analysis of the recorded investment of past due loans at March 31, 2024 and December 31, 2023.

		March 31, 2024
(In Thousands)		30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total   Loans
Agriculture and farmland		$	—	$	—	$	—	$	—	$	67,359	$	67,359
Construction			1,300		2,427		91		3,818		190,573		194,391
Commercial & industrial			245		—		86		331		218,393		218,724
Commercial real estate
Multifamily			—		—		—		—		190,146		190,146
Owner occupied			625		3,388		2,631		6,644		482,823		489,467
Non-owner occupied			—		3,920		352		4,272		585,459		589,731
Residential real estate
First liens			1,629		1,190		1,376		4,195		399,105		403,300
Second liens and lines of credit			315		223		97		635		70,425		71,060
Municipal			—		—		—		—		16,810		16,810
Consumer			31		2		—		33		4,440		4,473
Total		$	4,145	$	11,150	$	4,633	$	19,928	$	2,225,533	$	2,245,461
	December 31, 2023
(In Thousands)		30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total   Loans
Agriculture and farmland		$	14	$	—	$	—	$	14	$	65,847	$	65,861
Construction			10		—		191		201		178,282		178,483
Commercial & industrial			46		1		118		165		238,178		238,343
Commercial real estate
Multifamily			—		—		—		—		180,788		180,788
Owner occupied			156		2,802		137		3,095		498,637		501,732
Non-owner occupied			—		86		1,239		1,325		579,647		580,972
Residential real estate
First liens			719		419		872		2,010		400,423		402,433
Second liens and lines of credit			279		128		97		504		70,243		70,747
Municipal			—		—		—		—		16,756		16,756
Consumer			15		15		7		37		5,207		5,244
Total		$	1,239	$	3,451	$	2,661	$	7,351	$	2,234,008	$	2,241,359

Credit Quality Information

The following tables represent credit exposures by internally assigned grades as of March 31, 2024 and December 31, 2023. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all.

The Company’s internally assigned grades are as follows:

Pass – loans that are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. There are four sub-grades within the Pass category to further distinguish the loan.

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful – loans classified as Doubtful have all the weaknesses inherent in a Substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss – loans classified as a Loss are considered uncollectible and are immediately charged against allowances.

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of March 31, 2024.

	March 31, 2024
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2024		2023		2022		2021		2020		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Agriculture and farmland
Pass	$	6,690	$	1,428	$	14,236	$	9,414	$	5,063	$	21,213	$	4,266	$	29	$	62,339
Special mention		—		12		—		70		—		1,962		287		—		2,331
Substandard or lower		—		—		—		13		113		2,549		14		—		2,689
Total Agriculture and farmland	$	6,690	$	1,440	$	14,236	$	9,497	$	5,176	$	25,724	$	4,567	$	29	$	67,359
Agriculture and farmland
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		10,038		73,036		51,785		31,831		3,029		12,106		11,662		600		194,087
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		213		—		—		—		—		—		91		304
Total Construction		10,038		73,249		51,785		31,831		3,029		12,106		11,662		691		194,391
Construction
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial & industrial
Pass		3,333		26,451		30,931		24,297		13,660		12,368		99,921		125		211,086
Special mention		—		—		108		—		—		177		5,946		—		6,231
Substandard or lower		—		—		—		116		—		395		896		—		1,407
Total Commercial & industrial		3,333		26,451		31,039		24,413		13,660		12,940		106,763		125		218,724
Commercial & industrial
Current period gross charge-offs		—		—		—		—		—		6		—		—		6
Commercial real estate - Multifamily
Pass		3,153		15,343		86,392		51,492		18,431		13,178		299		—		188,288
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		1,858		—		—		1,858
Total Commercial real estate - Multifamily		3,153		15,343		86,392		51,492		18,431		15,036		299		—		190,146
Commercial real estate - Multifamily
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

	March 31, 2024
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2024		2023		2022		2021		2020		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial real estate - Owner occupied
Pass		3,329		62,493		124,354		95,588		51,074		127,528		9,108		—		473,474
Special mention		—		—		373		3,083		—		6,303		440		—		10,199
Substandard or lower		—		—		—		—		625		5,062		33		74		5,794
Total Commercial real estate - Owner occupied		3,329		62,493		124,727		98,671		51,699		138,893		9,581		74		489,467
Commercial real estate - Owner occupied
Current period gross charge-offs		—		—		—		—		—		6		—		—		6
Commercial real estate - Non-owner occupied
Pass		14,329		58,137		173,631		125,445		55,987		154,617		7,193		—		589,339
Special mention		—		—		—		41		—		—		—		—		41
Substandard or lower		—		—		—		—		—		277		—		74		351
Total Commercial real estate - Non-owner occupied		14,329		58,137		173,631		125,486		55,987		154,894		7,193		74		589,731
Commercial real estate - Non-owner occupied
Current period gross charge-offs		—		—		—		—		—		54		—		—		54
Municipal
Pass		48		449		—		388		924		2,573		91		—		4,473
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Commercial real estate - Municipal		48		449		—		388		924		2,573		91		—		4,473
Municipal
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Pass	$	40,920	$	237,337	$	481,329	$	338,455	$	148,168	$	343,583	$	132,540	$	754	$	1,723,086
Special mention		—		12		481		3,194		—		8,442		6,673		—		18,802
Substandard or lower		—		213		—		129		738		10,141		943		239		12,403
Total	$	40,920	$	237,562	$	481,810	$	341,778	$	148,906	$	362,166	$	140,156	$	993	$	1,754,291

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of December 31, 2023.

	December 31, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Agriculture and farmland
Pass	$	1,466	$	14,372	$	9,613	$	5,147	$	2,319	$	22,627	$	5,114	$	29	$	60,687
Special mention		—		—		30		—		811		1,206		342		—		2,389
Substandard or lower		13		—		15		121		—		2,576		60		—		2,785
Total Agriculture and farmland	$	1,479	$	14,372	$	9,658	$	5,268	$	3,130	$	26,409	$	5,516	$	29	$	65,861
Agriculture and farmland
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		64,460		52,888		30,993		3,057		5,244		5,816		14,424		1,317		178,199
Special mention		—		—		—		—		—		—		93		—		93
Substandard or lower		—		—		—		98		—		—		—		93		191
Total Construction		64,460		52,888		30,993		3,155		5,244		5,816		14,517		1,410		178,483
Construction
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial & industrial
Pass		29,776		33,213		25,315		14,018		4,429		9,110		120,747		68		236,676
Special mention		—		113		139		—		15		4		1,071		—		1,342
Substandard or lower		—		—		47		—		194		—		43		41		325
Total Commercial & industrial		29,776		33,326		25,501		14,018		4,638		9,114		121,861		109		238,343
Commercial & industrial
Current period gross charge-offs		—		—		—		—		—		—		200		—		200
Commercial real estate - Multifamily
Pass		14,918		80,127		50,320		18,871		6,031		8,351		298		—		178,916
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		1,872		—		—		1,872
Total Commercial real estate - Multifamily		14,918		80,127		50,320		18,871		6,031		10,223		298		—		180,788
Commercial real estate - Multifamily
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

	December 31, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial real estate - Owner occupied
Pass		61,336		135,472		98,261		51,485		39,174		91,315		8,852		6		485,901
Special mention		—		377		3,125		—		6,318		—		429		—		10,249
Substandard or lower		—		—		—		626		2,408		2,391		157		—		5,582
Total Commercial real estate - Owner occupied		61,336		135,849		101,386		52,111		47,900		93,706		9,438		6		501,732
Commercial real estate - Owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Non-owner occupied
Pass		58,335		174,248		126,009		56,468		64,301		93,193		6,376		86		579,016
Special mention		—		—		42		—		—		—		—		—		42
Substandard or lower		—		—		325		—		56		1,284		249		—		1,914
Total Commercial real estate - Non-owner occupied		58,335		174,248		126,376		56,468		64,357		94,477		6,625		86		580,972
Commercial real estate - Non-owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Municipal
Pass		529		—		420		1,675		—		2,526		94		—		5,244
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Commercial real estate - Municipal		529		—		420		1,675		—		2,526		94		—		5,244
Municipal
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Pass	$	230,820	$	490,320	$	340,931	$	150,721	$	121,498	$	232,938	$	155,905	$	1,506	$	1,724,639
Special mention		—		490		3,336		—		7,144		1,210		1,935		—		14,115
Substandard or lower		13		—		387		845		2,658		8,123		509		134		12,669
Total	$	230,833	$	490,810	$	344,654	$	151,566	$	131,300	$	242,271	$	158,349	$	1,640	$	1,751,423

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. As part of our adoption of CECL, the Company will monitor small balance, homogeneous loans, such as home equity, residential mortgage, and consumer loans based on delinquency status rather than the assignment of loan specific risk ratings. The Company will

evaluate credit quality based on the aging status of the loan. The following tables present the amortized cost of these loans based on payment activity, by origination year, as of March 31, 2024 and December 31, 2023.

	March 31, 2024
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2024		2023		2022		2021		2020		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Residential real estate - First liens
Performing	$	4,933	$	45,346	$	101,937	$	93,931	$	45,271	$	98,637	$	10,020	$	—	$	400,075
Nonperforming		—		—		—		29		99		3,097		—		—		3,225
Total Residential real estate - First liens	$	4,933	$	45,346	$	101,937	$	93,960	$	45,370	$	101,734	$	10,020	$	—	$	403,300
Residential real estate - First liens
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Residential real estate - Second liens and lines of credit
Performing		1,547		1,192		1,782		370		165		2,399		63,165		151		70,771
Nonperforming		—		—		—		—		—		140		149		—		289
Total Residential real estate - Second liens and lines of credit		1,547		1,192		1,782		370		165		2,539		63,314		151		71,060
Residential real estate - Second liens and lines of credit
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Consumer and other
Performing		281		4,897		434		179		118		81		10,820		—		16,810
Nonperforming		—		—		—		—		—		—		—		—		—
Total Consumer and other		281		4,897		434		179		118		81		10,820		—		16,810
Consumer and other
Current period gross charge-offs		—		1		2		5		—		14		—		—		22
Total
Performing	$	6,761	$	51,435	$	104,153	$	94,480	$	45,554	$	101,117	$	84,005	$	151	$	487,656
Nonperforming		—		—		—		29		99		3,237		149		—		3,514
Total	$	6,761	$	51,435	$	104,153	$	94,509	$	45,653	$	104,354	$	84,154	$	151	$	491,170

	December 31, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Residential real estate - First liens
Performing	$	45,236	$	99,877	$	99,972	$	43,063	$	23,404	$	80,456	$	8,982	$	—	$	400,990
Nonperforming		—		—		33		101		208		1,101		—		—		1,443
Total Residential real estate - First liens	$	45,236	$	99,877	$	100,005	$	43,164	$	23,612	$	81,557	$	8,982	$	—	$	402,433
Residential real estate - First liens
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Residential real estate - Second liens and lines of credit
Performing		1,207		1,818		386		184		336		2,270		64,396		—		70,597
Nonperforming		—		—		—		—		—		—		150		—		150
Total Residential real estate - Second liens and lines of credit		1,207		1,818		386		184		336		2,270		64,546		—		70,747
Residential real estate - Second liens and lines of credit
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Consumer and other
Performing		5,007		437		223		153		73		88		10,770		—		16,751
Nonperforming		—		—		—		—		—		—		5		—		5
Total Consumer and other		5,007		437		223		153		73		88		10,775		—		16,756
Consumer and other
Current period gross charge-offs		—		—		—		—		—		—		1		—		1
Total
Performing	$	51,450	$	102,132	$	100,581	$	43,400	$	23,813	$	82,814	$	84,148	$	—	$	488,338
Nonperforming		—		—		33		101		208		1,101		155		—		1,598
Total	$	51,450	$	102,132	$	100,614	$	43,501	$	24,021	$	83,915	$	84,303	$	—	$	489,936

Modifications to Borrowers Experiencing Financial Difficulty

The Company may modify loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, interest rate reduction or an other-than-insignificant payment delay. When principal forgiveness is provided, the amount of forgiveness is charged off against the allowance for credit losses. The Company may also provide multiple types of modifications on an individual loan. For the three months ended March 31, 2024 and 2023, the Company did not extend any modifications to borrowers experiencing financial difficulty that had a more-than-insignificant direct change in the contractual cash flows of the loan.

Purchased Credit Deteriorated Loans

The Company has purchased loans for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of these loans is as follows.

(In Thousands)	2023
Purchase price of loans at acquisition	$	431,600
Allowance for credit losses at acquisition		4,303
Non-credit (discount) premium at acquisition		(16,981	)
Par value of acquired loans at acquisition	$	418,922