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Allowance for Credit Losses
 6 Months Ended
Jun. 30, 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 June 30, 2024 and December 31, 2023.

Accrued interest receivable on loans totaled $9,304 at June 30, 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 and six months ended June 30, 2024 and 2023.

 

 

 

Beginning balance

 

 

Charge-offs

 

 

Recoveries

 

 

Allowance for Credit Losses on PCD Acquired Loans

 

 

Provision for credit losses

 

 

Ending balance

 

(In Thousands)

 

For the Three Months Ended June 30, 2024

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agriculture and farmland

 

$

12

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

12

 

Construction

 

 

1,523

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

316

 

 

 

1,841

 

Commercial & industrial

 

 

2,962

 

 

 

(4

)

 

 

6

 

 

 

—

 

 

 

471

 

 

 

3,435

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

 

1,592

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

320

 

 

 

1,914

 

Owner occupied

 

 

5,738

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

143

 

 

 

5,881

 

Non-owner occupied

 

 

6,099

 

 

 

—

 

 

 

4

 

 

 

2,300

 

 

 

(377

)

 

 

8,026

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First liens

 

 

4,675

 

 

 

—

 

 

 

6

 

 

 

—

 

 

 

(634

)

 

 

4,047

 

Second liens and lines of credit

 

 

1,071

 

 

 

—

 

 

 

3

 

 

 

—

 

 

 

(97

)

 

 

977

 

Municipal

 

 

68

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4

)

 

 

64

 

Consumer

 

 

102

 

 

 

(2

)

 

 

3

 

 

 

—

 

 

 

(12

)

 

 

91

 

Total

 

$

23,842

 

 

$

(6

)

 

$

26

 

 

$

2,300

 

 

$

126

 

 

$

26,288

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

 

Charge-offs

 

 

Recoveries

 

 

Provision for credit losses

 

 

Ending balance

 

 

 

 

(In Thousands)

 

For the Three Months Ended June 30, 2023

 

 

 

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agriculture and farmland

 

$

208

 

 

$

—

 

 

$

—

 

 

$

1

 

 

$

209

 

 

 

 

Construction

 

 

813

 

 

 

—

 

 

 

—

 

 

 

(85

)

 

 

728

 

 

 

 

Commercial & industrial

 

 

930

 

 

 

—

 

 

 

—

 

 

 

(201

)

 

 

729

 

 

 

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

 

730

 

 

 

—

 

 

 

—

 

 

 

(57

)

 

 

673

 

 

 

 

Owner occupied

 

 

1,593

 

 

 

—

 

 

 

—

 

 

 

(34

)

 

 

1,559

 

 

 

 

Non-owner occupied

 

 

4,315

 

 

 

—

 

 

 

12

 

 

 

23

 

 

 

4,350

 

 

 

 

Residential real estate

 

 

 

 

 

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

First liens

 

 

1,508

 

 

 

—

 

 

 

27

 

 

 

(138

)

 

 

1,397

 

 

 

 

Second liens and lines of credit

 

 

402

 

 

 

—

 

 

 

58

 

 

 

(77

)

 

 

383

 

 

 

 

Municipal

 

 

7

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7

 

 

 

 

Consumer

 

 

20

 

 

 

—

 

 

 

—

 

 

 

2

 

 

 

22

 

 

 

 

Unallocated

 

 

—

 

 

 

—

 

 

 

—

 

 

 

171

 

 

 

171

 

 

 

 

Total

 

$

10,526

 

 

$

—

 

 

$

97

 

 

$

(395

)

 

$

10,228

 

 

 

 

 

 

 

 

Beginning balance

 

 

Charge-offs

 

 

Recoveries

 

 

Allowance for Credit Losses on PCD Acquired Loans

 

 

Provision for credit losses

 

 

Ending balance

 

(In Thousands)

 

For the Six Months Ended June 30, 2024

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agriculture and farmland

 

$

12

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

12

 

Construction

 

 

959

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

880

 

 

 

1,841

 

Commercial & industrial

 

 

2,940

 

 

 

(10

)

 

 

8

 

 

 

—

 

 

 

497

 

 

 

3,435

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

 

1,483

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

429

 

 

 

1,914

 

Owner occupied

 

 

6,572

 

 

 

(6

)

 

 

1

 

 

 

—

 

 

 

(686

)

 

 

5,881

 

Non-owner occupied

 

 

5,773

 

 

 

(54

)

 

 

4

 

 

 

2,300

 

 

 

3

 

 

 

8,026

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First liens

 

 

4,778

 

 

 

—

 

 

 

13

 

 

 

—

 

 

 

(744

)

 

 

4,047

 

Second liens and lines of credit

 

 

1,072

 

 

 

—

 

 

 

10

 

 

 

—

 

 

 

(105

)

 

 

977

 

Municipal

 

 

79

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(15

)

 

 

64

 

Consumer

 

 

99

 

 

 

(25

)

 

 

5

 

 

 

—

 

 

 

12

 

 

 

91

 

Total

 

$

23,767

 

 

$

(95

)

 

$

45

 

 

$

2,300

 

 

$

271

 

 

$

26,288

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Six Months Ended June 30, 2023

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agriculture and farmland

 

$

279

 

 

$

(190

)

 

$

—

 

 

$

—

 

 

$

120

 

 

$

209

 

Construction

 

 

274

 

 

 

513

 

 

 

—

 

 

 

—

 

 

 

(59

)

 

 

728

 

Commercial & industrial

 

 

583

 

 

 

283

 

 

 

—

 

 

 

—

 

 

 

(137

)

 

 

729

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

 

480

 

 

 

340

 

 

 

—

 

 

 

—

 

 

 

(147

)

 

 

673

 

Owner occupied

 

 

635

 

 

 

760

 

 

 

—

 

 

 

—

 

 

 

164

 

 

 

1,559

 

Non-owner occupied

 

 

1,116

 

 

 

3,195

 

 

 

—

 

 

 

12

 

 

 

27

 

 

 

4,350

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First liens

 

 

1,029

 

 

 

635

 

 

 

—

 

 

 

28

 

 

 

(295

)

 

 

1,397

 

Second liens and lines of credit

 

 

218

 

 

 

140

 

 

 

—

 

 

 

59

 

 

 

(34

)

 

 

383

 

Municipal

 

 

12

 

 

 

(2

)

 

 

—

 

 

 

—

 

 

 

(3

)

 

 

7

 

Consumer

 

 

40

 

 

 

(19

)

 

 

—

 

 

 

—

 

 

 

1

 

 

 

22

 

Unallocated

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

171

 

 

 

171

 

Total

 

$

4,666

 

 

$

5,655

 

 

$

—

 

 

$

99

 

 

$

(192

)

 

$

10,228

 

 

The following tables present 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 June 30, 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

 

$

—

 

 

$

—

 

 

$

—

 

 

$

189

 

Construction

 

 

10

 

 

 

—

 

 

 

10

 

 

 

89

 

Commercial & industrial

 

 

128

 

 

 

83

 

 

 

211

 

 

 

—

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Owner occupied

 

 

2,615

 

 

 

629

 

 

 

3,244

 

 

 

—

 

Non-owner occupied

 

 

352

 

 

 

3,919

 

 

 

4,271

 

 

 

—

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

First liens

 

 

1,896

 

 

 

—

 

 

 

1,896

 

 

 

307

 

Second liens and lines of credit

 

 

332

 

 

 

—

 

 

 

332

 

 

 

39

 

Municipal

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer

 

 

1

 

 

 

—

 

 

 

1

 

 

 

—

 

Total

 

$

5,334

 

 

$

4,631

 

 

$

9,965

 

 

$

624

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 $88 and $111 of interest income on nonaccrual loans during the three and six months ended June 30, 2024 respectively and $12 and $28 for the three and six months ended June 30, 2023, respectively.

The following tables present, by class of loans, the carrying value of collateral dependent nonaccrual loans and type of collateral as of June 30, 2024 and December 31, 2023.

 

 

 

June 30, 2024

 

(In Thousands)

 

Real Estate

 

 

Business Assets

 

 

Other

 

 

Total

 

Agriculture and farmland loans

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Construction

 

 

10

 

 

 

—

 

 

 

—

 

 

 

10

 

Commercial & industrial loans

 

 

—

 

 

 

211

 

 

 

—

 

 

 

211

 

Commercial real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

     Multifamily

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

     Owner occupied

 

 

3,244

 

 

 

—

 

 

 

—

 

 

 

3,244

 

     Non-owner occupied

 

 

4,271

 

 

 

—

 

 

 

—

 

 

 

4,271

 

Residential real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

     First liens

 

 

1,896

 

 

 

—

 

 

 

—

 

 

 

1,896

 

     Second liens and lines of credit

 

 

332

 

 

 

—

 

 

 

—

 

 

 

332

 

Municipal

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer

 

 

—

 

 

 

—

 

 

 

1

 

 

 

1

 

 

$

9,753

 

 

$

211

 

 

$

1

 

 

$

9,965

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 June 30, 2024 and December 31, 2023.

 

 

June 30, 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

 

$

—

 

 

$

—

 

 

$

189

 

 

$

189

 

 

$

66,748

 

 

$

66,937

 

Construction

 

 

—

 

 

 

10

 

 

 

89

 

 

 

99

 

 

 

178,598

 

 

 

178,697

 

Commercial & industrial

 

 

50

 

 

 

180

 

 

 

30

 

 

 

260

 

 

 

240,116

 

 

 

240,376

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

195,814

 

 

 

195,814

 

Owner occupied

 

 

1,758

 

 

 

618

 

 

 

2,976

 

 

 

5,352

 

 

 

465,193

 

 

 

470,545

 

Non-owner occupied

 

 

—

 

 

 

218

 

 

 

352

 

 

 

570

 

 

 

576,878

 

 

 

577,448

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First liens

 

 

1,806

 

 

 

311

 

 

 

1,359

 

 

 

3,476

 

 

 

370,567

 

 

 

374,043

 

Second liens and lines of credit

 

 

233

 

 

 

1

 

 

 

339

 

 

 

573

 

 

 

68,417

 

 

 

68,990

 

Municipal

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

15,507

 

 

 

15,507

 

Consumer

 

 

8

 

 

 

—

 

 

 

—

 

 

 

8

 

 

 

4,354

 

 

 

4,362

 

Total

 

$

3,855

 

 

$

1,338

 

 

$

5,334

 

 

$

10,527

 

 

$

2,182,192

 

 

$

2,192,719

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

161,624

 

 

 

161,825

 

Commercial & industrial

 

 

46

 

 

 

1

 

 

 

118

 

 

 

165

 

 

 

232,247

 

 

 

232,412

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

176,843

 

 

 

176,843

 

Owner occupied

 

 

156

 

 

 

2,802

 

 

 

137

 

 

 

3,095

 

 

 

471,869

 

 

 

474,964

 

Non-owner occupied

 

 

—

 

 

 

86

 

 

 

1,239

 

 

 

1,325

 

 

 

550,156

 

 

 

551,481

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First liens

 

 

719

 

 

 

419

 

 

 

872

 

 

 

2,010

 

 

 

374,082

 

 

 

376,092

 

Second liens and lines of credit

 

 

279

 

 

 

128

 

 

 

97

 

 

 

504

 

 

 

66,144

 

 

 

66,648

 

Municipal

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

16,740

 

 

 

16,740

 

Consumer

 

 

15

 

 

 

15

 

 

 

7

 

 

 

37

 

 

 

5,207

 

 

 

5,244

 

Total

 

$

1,239

 

 

$

3,451

 

 

$

2,661

 

 

$

7,351

 

 

$

2,120,759

 

 

$

2,128,110

 

Credit Quality Information

The following tables represent credit exposures by internally assigned grades as of June 30, 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 tables present the classes of the loan portfolio summarized by the internal risk rating system as of June 30, 2024.

 

 

 

June 30, 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

 

$

7,626

 

 

$

1,409

 

 

$

13,990

 

 

$

9,248

 

 

$

4,962

 

 

$

22,036

 

 

$

3,977

 

 

$

14

 

 

$

63,262

 

Special mention

 

 

—

 

 

 

11

 

 

 

—

 

 

 

64

 

 

 

—

 

 

 

1,909

 

 

 

216

 

 

 

—

 

 

 

2,200

 

Substandard or lower

 

 

—

 

 

 

—

 

 

 

—

 

 

 

11

 

 

 

104

 

 

 

1,346

 

 

 

14

 

 

 

—

 

 

 

1,475

 

Total Agriculture and farmland

 

$

7,626

 

 

$

1,420

 

 

$

13,990

 

 

$

9,323

 

 

$

5,066

 

 

$

25,291

 

 

$

4,207

 

 

$

14

 

 

$

66,937

 

Agriculture and farmland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

 

16,724

 

 

 

73,895

 

 

 

39,580

 

 

 

23,160

 

 

 

2,762

 

 

 

10,096

 

 

 

12,188

 

 

 

—

 

 

 

178,405

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard or lower

 

 

—

 

 

 

203

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

89

 

 

 

292

 

Total Construction

 

 

16,724

 

 

 

74,098

 

 

 

39,580

 

 

 

23,160

 

 

 

2,762

 

 

 

10,096

 

 

 

12,188

 

 

 

89

 

 

 

178,697

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial & industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

 

22,207

 

 

 

25,273

 

 

 

26,724

 

 

 

21,475

 

 

 

11,990

 

 

 

9,665

 

 

 

113,242

 

 

 

344

 

 

 

230,920

 

Special mention

 

 

18

 

 

 

171

 

 

 

231

 

 

 

110

 

 

 

—

 

 

 

391

 

 

 

6,990

 

 

 

—

 

 

 

7,911

 

Substandard or lower

 

 

—

 

 

 

78

 

 

 

78

 

 

 

116

 

 

 

—

 

 

 

363

 

 

 

893

 

 

 

17

 

 

 

1,545

 

Total Commercial & industrial

 

 

22,225

 

 

 

25,522

 

 

 

27,033

 

 

 

21,701

 

 

 

11,990

 

 

 

10,419

 

 

 

121,125

 

 

 

361

 

 

 

240,376

 

Commercial & industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4

 

 

 

6

 

 

 

—

 

 

 

—

 

 

 

10

 

Commercial real estate - Multifamily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

 

15,170

 

 

 

9,327

 

 

 

87,731

 

 

 

51,266

 

 

 

19,532

 

 

 

10,616

 

 

 

328

 

 

 

—

 

 

 

193,970

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,844

 

 

 

—

 

 

 

—

 

 

 

1,844

 

Substandard or lower

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Commercial real estate - Multifamily

 

 

15,170

 

 

 

9,327

 

 

 

87,731

 

 

 

51,266

 

 

 

19,532

 

 

 

12,460

 

 

 

328

 

 

 

—

 

 

 

195,814

 

Commercial real estate - Multifamily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

June 30, 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

 

 

16,208

 

 

 

55,288

 

 

 

112,341

 

 

 

94,052

 

 

 

49,371

 

 

 

113,755

 

 

 

11,307

 

 

 

—

 

 

 

452,322

 

Special mention

 

 

—

 

 

 

—

 

 

 

3,133

 

 

 

2,437

 

 

 

416

 

 

 

5,971

 

 

 

292

 

 

 

—

 

 

 

12,249

 

Substandard or lower

 

 

—

 

 

 

—

 

 

 

184

 

 

 

—

 

 

 

629

 

 

 

5,032

 

 

 

58

 

 

 

71

 

 

 

5,974

 

Total Commercial real estate - Owner occupied

 

 

16,208

 

 

 

55,288

 

 

 

115,658

 

 

 

96,489

 

 

 

50,416

 

 

 

124,758

 

 

 

11,657

 

 

 

71

 

 

 

470,545

 

Commercial real estate - Owner occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6

 

 

 

—

 

 

 

—

 

 

 

6

 

Commercial real estate - Non-owner occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

 

30,111

 

 

 

55,951

 

 

 

168,695

 

 

 

117,031

 

 

 

51,523

 

 

 

131,928

 

 

 

10,183

 

 

 

219

 

 

 

565,641

 

Special mention

 

 

—

 

 

 

1,000

 

 

 

—

 

 

 

39

 

 

 

3,399

 

 

 

3,099

 

 

 

—

 

 

 

—

 

 

 

7,537

 

Substandard or lower

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,919

 

 

 

—

 

 

 

277

 

 

 

—

 

 

 

74

 

 

 

4,270

 

Total Commercial real estate - Non-owner occupied

 

 

30,111

 

 

 

56,951

 

 

 

168,695

 

 

 

120,989

 

 

 

54,922

 

 

 

135,304

 

 

 

10,183

 

 

 

293

 

 

 

577,448

 

Commercial real estate - Non-owner occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

54

 

 

 

—

 

 

 

—

 

 

 

54

 

Municipal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

 

46

 

 

 

438

 

 

 

—

 

 

 

378

 

 

 

922

 

 

 

2,490

 

 

 

88

 

 

 

—

 

 

 

4,362

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard or lower

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Commercial real estate - Municipal

 

 

46

 

 

 

438

 

 

 

—

 

 

 

378

 

 

 

922

 

 

 

2,490

 

 

 

88

 

 

 

—

 

 

 

4,362

 

Municipal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

108,092

 

 

$

221,581

 

 

$

449,061

 

 

$

316,610

 

 

$

141,062

 

 

$

300,586

 

 

$

151,313

 

 

$

577

 

 

$

1,688,882

 

Special mention

 

 

18

 

 

 

1,182

 

 

 

3,364

 

 

 

2,650

 

 

 

3,815

 

 

 

13,214

 

 

 

7,498

 

 

 

—

 

 

 

31,741

 

Substandard or lower

 

 

—

 

 

 

281

 

 

 

262

 

 

 

4,046

 

 

 

733

 

 

 

7,018

 

 

 

965

 

 

 

251

 

 

 

13,556

 

Total

 

$

108,110

 

 

$

223,044

 

 

$

452,687

 

 

$

323,306

 

 

$

145,610

 

 

$

320,818

 

 

$

159,776

 

 

$

828

 

 

$

1,734,179

 

 

 

The following tables present 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

 

 

55,462

 

 

 

45,206

 

 

 

30,593

 

 

 

2,932

 

 

 

6,161

 

 

 

5,446

 

 

 

14,424

 

 

 

1,317

 

 

 

161,541

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

93

 

 

 

—

 

 

 

93

 

Substandard or lower

 

 

—

 

 

 

—

 

 

 

—

 

 

 

98

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

93

 

 

 

191

 

Total Construction

 

 

55,462

 

 

 

45,206

 

 

 

30,593

 

 

 

3,030

 

 

 

6,161

 

 

 

5,446

 

 

 

14,517

 

 

 

1,410

 

 

 

161,825

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial & industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

 

29,586

 

 

 

31,653

 

 

 

24,184

 

 

 

13,831

 

 

 

4,285

 

 

 

7,536

 

 

 

119,602

 

 

 

68

 

 

 

230,745

 

Special mention

 

 

—

 

 

 

113

 

 

 

139

 

 

 

—

 

 

 

15

 

 

 

4

 

 

 

1,071

 

 

 

—

 

 

 

1,342

 

Substandard or lower

 

 

—

 

 

 

—

 

 

 

47

 

 

 

—

 

 

 

194

 

 

 

—

 

 

 

43

 

 

 

41

 

 

 

325

 

Total Commercial & industrial

 

 

29,586

 

 

 

31,766

 

 

 

24,370

 

 

 

13,831

 

 

 

4,494

 

 

 

7,540

 

 

 

120,716

 

 

 

109

 

 

 

232,412

 

Commercial & industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

200

 

 

 

—

 

 

 

200

 

Commercial real estate - Multifamily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

 

12,587

 

 

 

80,127

 

 

 

50,320

 

 

 

18,871

 

 

 

6,031

 

 

 

6,737

 

 

 

298

 

 

 

—

 

 

 

174,971

 

Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard or lower

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,872

 

 

 

—

 

 

 

—

 

 

 

1,872

 

Total Commercial real estate - Multifamily

 

 

12,587

 

 

 

80,127

 

 

 

50,320

 

 

 

18,871

 

 

 

6,031

 

 

 

8,609

 

 

 

298

 

 

 

—

 

 

 

176,843

 

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

 

 

53,765

 

 

 

127,684

 

 

 

96,193

 

 

 

50,888

 

 

 

39,043

 

 

 

83,753

 

 

 

7,801

 

 

 

6

 

 

 

459,133

 

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

 

 

53,765

 

 

 

128,061

 

 

 

99,318

 

 

 

51,514

 

 

 

47,769

 

 

 

86,144

 

 

 

8,387

 

 

 

6

 

 

 

474,964

 

Commercial real estate - Owner occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial real estate - Non-owner occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

 

58,210

 

 

 

173,415

 

 

 

118,081

 

 

 

56,025

 

 

 

59,792

 

 

 

78,465

 

 

 

6,177

 

 

 

86

 

 

 

550,251

 

Special mention

 

 

—

 

 

 

—

 

 

 

42

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

42

 

Substandard or lower

 

 

—

 

 

 

—

 

 

 

325

 

 

 

—

 

 

 

56

 

 

 

558

 

 

 

249

 

 

 

—

 

 

 

1,188

 

Total Commercial real estate - Non-owner occupied

 

 

58,210

 

 

 

173,415

 

 

 

118,448

 

 

 

56,025

 

 

 

59,848

 

 

 

79,023

 

 

 

6,426

 

 

 

86

 

 

 

551,481

 

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

 

$

211,605

 

 

$

472,457

 

 

$

329,404

 

 

$

149,369

 

 

$

117,631

 

 

$

207,090

 

 

$

153,510

 

 

$

1,506

 

 

$

1,642,572

 

Special mention

 

 

—

 

 

 

490

 

 

 

3,336

 

 

 

—

 

 

 

7,144

 

 

 

1,210

 

 

 

1,935

 

 

 

—

 

 

 

14,115

 

Substandard or lower

 

 

13

 

 

 

—

 

 

 

387

 

 

 

845

 

 

 

2,658

 

 

 

7,397

 

 

 

509

 

 

 

134

 

 

 

11,943

 

Total

 

$

211,618

 

 

$

472,947

 

 

$

333,127

 

 

$

150,214

 

 

$

127,433

 

 

$

215,697

 

 

$

155,954

 

 

$

1,640

 

 

$

1,668,630

 

 

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 June 30, 2024 and December 31, 2023.

 

 

June 30, 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

 

$

16,571

 

 

$

41,277

 

 

$

91,018

 

 

$

87,324

 

 

$

37,188

 

 

$

88,841

 

 

$

9,816

 

 

$

—

 

 

$

372,035

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

26

 

 

 

—

 

 

 

1,982

 

 

 

—

 

 

 

—

 

 

 

2,008

 

Total Residential real estate - First liens

 

$

16,571

 

 

$

41,277

 

 

$

91,018

 

 

$

87,350

 

 

$

37,188

 

 

$

90,823

 

 

$

9,816

 

 

$

—

 

 

$

374,043

 

Residential real estate - First liens

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential real estate - Second liens and lines of credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

1,838

 

 

 

971

 

 

 

1,615

 

 

 

380

 

 

 

64

 

 

 

2,131

 

 

 

60,642

 

 

 

998

 

 

 

68,639

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

165

 

 

 

39

 

 

 

147

 

 

 

351

 

Total Residential real estate - Second liens and lines of credit

 

 

1,838

 

 

 

971

 

 

 

1,615

 

 

 

380

 

 

 

64

 

 

 

2,296

 

 

 

60,681

 

 

 

1,145

 

 

 

68,990

 

Residential real estate - Second liens and lines of credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer and other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

679

 

 

 

4,787

 

 

 

355

 

 

 

144

 

 

 

93

 

 

 

72

 

 

 

9,377

 

 

 

—

 

 

 

15,507

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Consumer and other

 

 

679

 

 

 

4,787

 

 

 

355

 

 

 

144

 

 

 

93

 

 

 

72

 

 

 

9,377

 

 

 

—

 

 

 

15,507

 

Consumer and other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

2

 

 

 

2

 

 

 

5

 

 

 

1

 

 

 

15

 

 

 

—

 

 

 

—

 

 

 

25

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

19,088

 

 

$

47,035

 

 

$

92,988

 

 

$

87,848

 

 

$

37,345

 

 

$

91,044

 

 

$

79,835

 

 

$

998

 

 

$

456,181

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

26

 

 

 

—

 

 

 

2,147

 

 

 

39

 

 

 

147

 

 

 

2,359

 

Total

 

$

19,088

 

 

$

47,035

 

 

$

92,988

 

 

$

87,874

 

 

$

37,345

 

 

$

93,191

 

 

$

79,874

 

 

$

1,145

 

 

$

458,540

 

 

 

 

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

 

$

41,984

 

 

$

90,220

 

 

$

95,232

 

 

$

37,966

 

 

$

22,934

 

 

$

77,331

 

 

$

8,982

 

 

$

—

 

 

$

374,649

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

33

 

 

 

101

 

 

 

208

 

 

 

1,101

 

 

 

—

 

 

 

—

 

 

 

1,443

 

Total Residential real estate - First liens

 

$

41,984

 

 

$

90,220

 

 

$

95,265

 

 

$

38,067

 

 

$

23,142

 

 

$

78,432

 

 

$

8,982

 

 

$

—

 

 

$

376,092

 

Residential real estate - First liens

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential real estate - Second liens and lines of credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

1,045

 

 

 

1,702

 

 

 

386

 

 

 

184

 

 

 

205

 

 

 

2,259

 

 

 

60,717

 

 

 

—

 

 

 

66,498

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

150

 

 

 

—

 

 

 

150

 

Total Residential real estate - Second liens and lines of credit

 

 

1,045

 

 

 

1,702

 

 

 

386

 

 

 

184

 

 

 

205

 

 

 

2,259

 

 

 

60,867

 

 

 

—

 

 

 

66,648

 

Residential real estate - Second liens and lines of credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer and other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

5,007

 

 

 

437

 

 

 

213

 

 

 

150

 

 

 

73

 

 

 

85

 

 

 

10,770

 

 

 

—

 

 

 

16,735

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5

 

 

 

—

 

 

 

5

 

Total Consumer and other

 

 

5,007

 

 

 

437

 

 

 

213

 

 

 

150

 

 

 

73

 

 

 

85

 

 

 

10,775

 

 

 

—

 

 

 

16,740

 

Consumer and other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period gross charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

48,036

 

 

$

92,359

 

 

$

95,831

 

 

$

38,300

 

 

$

23,212

 

 

$

79,675

 

 

$

80,469

 

 

$

—

 

 

$

457,882

 

Nonperforming

 

 

—

 

 

 

—

 

 

 

33

 

 

 

101

 

 

 

208

 

 

 

1,101

 

 

 

155

 

 

 

—

 

 

 

1,598

 

Total

 

$

48,036

 

 

$

92,359

 

 

$

95,864

 

 

$

38,401

 

 

$

23,420

 

 

$

80,776

 

 

$

80,624

 

 

$

—

 

 

$

459,480

 

 

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 June 30, 2024, the Company provided a payment delay to a Non Owner Occupied Commercial Real Estate borrower experiencing financial difficulty. At June 30, 2024, the amortized cost basis of the loan is $3,919 and has been placed on non-accrual. For the three months ended June 30, 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 loans.

 

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

 

$

435,704

 

Allowance for credit losses at acquisition

 

 

6,603

 

Non-credit (discount) premium at acquisition

 

 

(16,981

)

Par value of acquired loans at acquisition

 

$

425,326