Loans are stated at amortized cost net of an allowance for credit losses. Amortized cost is the unpaid principal net of unearned premiums and discounts, and net deferred origination fees and costs. Deferred loan origination fees are reduced by loan origination costs and are amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method. Interest on substantially all loans is credited to income based on the principal amount outstanding.

Loans expected to be sold are classified as held for sale in the consolidated financial statements and are recorded at fair value, taking into consideration future commitments to sell the loans. These loans are primarily for 1-4 family residential properties.

Accrued interest on loans, which is excluded from the amortized cost of the balances above, totaled $22.6 million and $23.0 million at March 31, 2023 and December 31, 2022, respectively.

Most of the Company’s business activities are with customers located near the Company's branch locations in Illinois, Missouri, and Texas. At March 31, 2023, the Company’s loan portfolio included $548.8 million of loans to borrowers whose businesses are directly related to agriculture. Of this amount, $422.4 million was concentrated in corn and other grain farming. Total loans to borrowers whose businesses are directly related to agriculture decreased $28.4 million from $577.2 million at December 31, 2022 due to seasonal timing of cash flow requirements. Loans concentrated in corn and other grain farming decreased $22.8 million from $445.2 million at December 31, 2022. The Company's underwriting practices include collateralization of loans. Any extended period of low commodity prices, drought conditions, significantly reduced yields on crops and/or reduced levels of government assistance to the agricultural industry could result in an increase in the level of problem agriculture loans and potentially result in loan losses within the agricultural portfolio.

In addition, the Company has $211.4 million of loans to motels and hotels. The performance of these loans is dependent on borrower specific issues as well as the general level of business and personal travel within the region. While the Company adheres to sound underwriting standards, a prolonged period of reduced business or personal travel could result in an increase in nonperforming loans to this business segment and potentially in loan losses. The Company also has $945.7 million of loans to lessors of non-residential buildings, and $462.8 million of loans to lessors of residential buildings and dwellings.

The structure of the Company’s loan approval process is based on progressively larger lending authorities granted to individual loan officers, loan committees, and ultimately the board of directors. Outstanding balances to one borrower or affiliated borrowers are limited by federal regulation and most borrowers are below regulatory thresholds. The Company can occasionally have outstanding balances to one borrower up to but not exceeding the regulatory threshold should underwriting guidelines warrant. Most of the Company’s loans are to businesses located in the geographic market areas served by the Company’s branch bank system. Additionally, a significant portion of the collateral securing the loans in the portfolio is located within the Company’s primary geographic footprint. In general, the Company adheres to loan underwriting standards consistent with industry guidelines for all loan segments.

Commercial Real Estate Loans. Commercial real estate loans are generally comprised of loans to small business entities to purchase or expand structures in which the business operations are housed, loans to owners of real estate who lease space to non-related commercial entities, loans for construction and land development, loans to hotel operators, and loans to owners of multi-family residential structures, such as apartment buildings. Commercial real estate loans are underwritten based on historical and projected cash flows of the borrower and secondarily on the underlying real estate pledged as collateral on the debt. For the various types of commercial real estate loans, minimum criteria have been established within the Company’s loan policy regarding debt service coverage while maximum limits on loan-to-value and amortization periods have been defined. Maximum loan-to-value ratios range from 65% to 80% depending upon the type of real estate collateral, while the desired minimum debt coverage ratio is 1.20x. Amortization periods for commercial real estate loans are generally limited to twenty or twenty five years, depending on the loan-to-value. The Company’s commercial real estate portfolio is below the thresholds that would designate a concentration in commercial real estate lending, as established by the federal banking regulators.

Commercial and Industrial Loans. Commercial and industrial loans are primarily comprised of working capital loans used to purchase inventory and fund accounts receivable that are secured by business assets other than real estate. These loans are generally written for one year or less. Also, equipment financing is provided to businesses with these loans generally limited to 80% of the value of the collateral and amortization periods limited to seven years. Commercial loans are often accompanied by a personal guaranty of the principal owners of a business. Like commercial real estate loans, the underlying cash flow of the business is the primary consideration in the underwriting process. The financial condition of commercial borrowers is monitored at least annually with the type of financial information required determined by the size of the relationship. Measures employed by the Company for businesses with higher risk profiles include the use of government- assisted lending programs through the Small Business Administration and U.S. Department of Agriculture.

Agricultural and Agricultural Real Estate Loans. Agricultural loans are generally comprised of seasonal operating lines to cash grain farmers to plant and harvest corn and soybeans and term loans to fund the purchase of equipment. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating year based on industry developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop. Loan-to-value ratios on loans secured by farmland generally do not exceed 65% and have amortization periods limited to twenty-five years. Federal government-assistance lending programs through the Farm Service Agency are used to mitigate the level of credit risk when deemed appropriate.

Residential Real Estate Loans. Residential real estate loans generally include loans for the purchase or refinance of residential real estate properties consisting of one-to-four units and home equity loans and lines of credit. The Company sells most of its long-term fixed rate residential real estate loans to secondary market investors. The Company also releases the servicing of these loans upon sale. Residential real estate loans are typically underwritten to conform to industry standards including criteria for maximum debt-to-income and loan-to-value ratios as well as minimum credit scores. Loans secured by first liens on residential real estate held in the portfolio typically do not exceed 80% of the value of the collateral and have amortization periods of twenty-five years or less. The Company does not originate subprime mortgage loans.

Consumer Loans. Consumer loans are primarily comprised of loans to individuals for personal and household purposes such as the purchase of an automobile or other living expenses. Minimum underwriting criteria have been established that consider credit score, debt-to-income ratio, employment history, and collateral coverage. Typically, consumer loans are set up on monthly payments with amortization periods based on the type and age of the collateral.

Other Loans. Other loans consist primarily of loans to municipalities to support community projects such as infrastructure improvements or equipment purchases. Underwriting guidelines for these loans are consistent with those established for commercial loans with the additional repayment source of the taxing authority of the municipality.

The allowance for credit losses represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining contractual life of the assets. The provision for credit losses is the charge against current earnings that is determined by the Company as the amount needed to maintain an adequate allowance for credit losses. In determining the adequacy of the allowance for credit losses, and therefore the provision to be charged to current earnings, the Company relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by the overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net loan losses, the level and composition of nonaccrual, past due and modified loans, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates. The Company estimates the appropriate level of allowance for credit losses by evaluating large individually evaluated loans separately from non-individually evaluated loans.

The Company individually evaluates certain loans for impairment. In general, these loans have been internally identified via the Company’s loan grading system as credits requiring management’s attention due to underlying problems in the borrower’s business or collateral concerns. This evaluation considers expected future cash flows, the value of collateral and other factors that may impact the borrower’s ability to make payments when due. For loans greater than $250,000, impairment is individually measured each quarter using one of three alternatives: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price, if available; or (3) the fair value of the collateral less costs to sell for collateral dependent loans and loans for which foreclosure is deemed to be probable. A specific allowance is assigned when expected cash flows or collateral are less than the carrying amount of the loan. The carrying value of the loan reflects reductions from prior charge-offs.

Non-individually evaluated loans comprise the vast majority of the Company’s total loan portfolio and include loans in accrual status and those credits not identified as modified loans. A small portion of these loans are considered “criticized” due to the risk rating assigned reflecting elevated credit risk due to characteristics, such as a strained cash flow position, associated with the individual borrowers. Criticized loans are those assigned risk ratings of Special Mention, Substandard, or Doubtful.

To determine the allowance, the loan portfolio is segmented based on similar risk characteristics. The allowance for credit losses is estimated using a discounted cash flow (DCF) methodology. The DCF projects future cash flows over the life of the loan portfolio. Probability of default (PD) and loss given default (LGD) are key components in calculating expected losses in this model. The PD is forecasted using a regression model that determines the likelihood of default with a forward-looking forecast of unemployment rates. The LGD is the percentage of defaulted loans that is ultimately charged off. The allowance is calculated as the net present value of the expected cash flows less the amortized cost basis of the loans. Prior to 2022, the allowance for credit losses was measured on a collective (pool) basis for non-individually evaluated loans with similar risk characteristics. Historical credit loss experience provided the basis for the estimate of expected credit losses. Adjustments to expected losses are made using qualitative factors for relevant to each loan segment including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting, and concentrations. In addition, a forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period.

The Company also considers specific current economic events occurring globally, in the U.S. and in its local markets. Events considered include the status of trade agreements with China, scheduled increases in minimum wage and changes to the minimum salary threshold for overtime provisions, current and projected unemployment rates, current and projected grain and oil prices and economies of local markets where customers work and operate.

Within each pool, risk elements are evaluated that have specific impacts to the borrowers within the pool. These, along with the general risks and events, and the specific lending policies and procedures by loan type described above, are analyzed to estimate the qualitative factors used to adjust the historical loss rates.

During the current period, the following assumptions and factors were considered when determining the historical loss rate and any potential adjustments by loan pool.

Construction and Land Development Loans. Historical losses in this segment remain very low. While staffing shortages and supply chain disruptions cause risk in this segment, most projects are associated with financially strong borrowers. The qualitative factors for this segment were not changed.

Agricultural Real Estate Loans. Historical losses in the segment remain very low. Farmland values have increased over an extended period of time and there are no indications that this will change in the next year. There was no change to the qualitative factors for this segment.

1- 4 Family Residential Properties Loans. The loan segment has remained stable throughout the last several years. Both adversely classified and past dues have been consistent. There was no change to the qualitative factors for this segment.

Commercial Real Estate Loans. This segment includes the Company's largest balances and the largest allowance for credit losses. The qualitative factors on both non-owner occupied and owner-occupied loans for this segment were increased due to actual and expected changes in economic and business conditions.

Agricultural Loans. Losses in this segment are very low. Commodity prices have been elevated and yields have been strong. The qualitative factors of this segment was not changed.

Commercial and Industrial Loans. This segment includes the second largest balance of allowance for credit losses. The qualitative factors for this segment was increased due to actual and expected changes in economic and business conditions.

Consumer Loans. This segment is the smallest portion of the Company's loan portfolio. There was no significant change to the qualitative factors.

Acquired Loans. Prior to January 1, 2020 loans acquired with evidence of credit deterioration since origination and for which it was probable that all contractually required payments would not be collected were considered purchased credit impaired at the time of acquisition. Purchase credit-impaired ("PCI") loans were accounted for under ASC 310-30, Receivables--Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30"), and were initially measured at fair value, which included the estimated future credit losses expected to be incurred over the life of the loan.

Accordingly, an allowance for credit losses related to these loans was not carried over and recorded at the acquisition date. The cash flows expected to be collected were estimated using current key assumptions, such as default rates, value of underlying collateral, severity and prepayment speeds.

Subsequent to January 1, 2020, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans.

For acquired loans not deemed purchased credit deteriorated at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. At the acquisition date, an initial allowance for expected credit losses is estimated and recorded as credit loss expense. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

The following table presents the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2023 (in thousands):


	Construction and Land Development		Agricultural Real Estate			1-4 Family Residential Properties			Commercial Real Estate			Agricultural Loans			Commercial and Industrial		Consumer Loans		Total
Three months ended March 31, 2023
Beginning balance	$	2,250	$	1,433		$	3,742		$	28,157		$	585		$	20,808	$	2,118	$	59,093
Initial allowance on loans purchased with credit deterioration		—		—			—			—			—			—		—		—
Provision for credit loss expense		176		(29	)		(306	)		(834	)		(8	)		91		93		(817	)
Loans charged off		—		—			40			—			—			13		427		480
Recoveries collected		—		—			24			4			3			256		140		427
Ending balance	$	2,426	$	1,404		$	3,420		$	27,327		$	580		$	21,142	$	1,924	$	58,223

The following tables present the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2022 and for the year ended December 31, 2022 (in thousands):


	Construction and Land Development			Agricultural Real Estate		1-4 Family Residential Properties		Commercial Real Estate		Agricultural Loans			Commercial and Industrial			Consumer Loans			Total
Three months ended March 31, 2022
Beginning balance (prior to adoption of ASC 326)	$	1,743		$	1,257	$	2,330	$	26,246	$	983		$	19,241		$	2,855		$	54,655
Initial allowance on loans purchased with credit deterioration		272			—		3		478		—			94			16			863
Provision for credit loss expense		(25	)		714		1,264		3,613		68			(2,045	)		(637	)		2,952
Loans charged off		2			—		72		339		—			3			358			774
Recoveries collected		—			—		203		347		—			61			167			778
Ending balance	$	1,988		$	1,971	$	3,728	$	30,345	$	1,051		$	17,348		$	2,043		$	58,474

Twelve months ended December 31, 2022
Beginning balance (prior to adoption of ASC 326)	$	1,743		$	1,257	$	2,330	$	26,246	$	983		$	19,241		$	2,855		$	54,655
Impact of adopting ASC 326		272			—		3		478		—			94			16			863
Provision for credit loss expense		137			176		1,241		1,462		(359	)		2,135			14			4,806
Loans charged off		2			—		191		414		93			870			1,380			2,950
Recoveries collected		100			—		359		385		54			208			613			1,719
Ending balance	$	2,250		$	1,433	$	3,742	$	28,157	$	585		$	20,808		$	2,118		$	59,093

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For individually evaluated loans that are considered solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to time frames established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge-off of unsecured open-end loans when the loan is 180 days past due, and charge down to the net realizable value when other secured loans are 120 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, collateral support, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Company uses the following definitions for risk ratings which are commensurate with a loan considered “criticized”:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current sound-worthiness and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing factors, conditions and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered pass rated loans.

The following tables present the credit risk profile of the Company’s loan portfolio on amortized cost basis based on risk rating category and year of origination as of March 31, 2023 (in thousands):


	Term Loans by Origination Year												Revolving
Risk rating	2023		2022		2021		2020		2019		Prior		Loans		Total
March 31, 2023
Construction and land development loans
Pass	$	9,251	$	79,695	$	35,078	$	7,325	$	15,864	$	11,465	$	—	$	158,678
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		14		465		—		479
Total	$	9,251	$	79,695	$	35,078	$	7,325	$	15,878	$	11,930	$	—	$	159,157
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agricultural real estate loans
Pass	$	3,716	$	167,382	$	64,522	$	57,166	$	22,731	$	80,117	$	—	$	395,634
Special mention		—		112		—		251		1,240		3,499		—		5,102
Substandard		—		—		—		—		—		1,221		—		1,221
Total	$	3,716	$	167,494	$	64,522	$	57,417	$	23,971	$	84,837	$	—	$	401,957
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1-4 family residential property loans
Pass	$	8,069	$	86,712	$	83,578	$	75,367	$	26,755	$	85,754	$	42,060	$	408,295
Special mention		—		186		123		—		43		4,172		—		4,524
Substandard		51		970		501		523		280		9,401		—		11,726
Total	$	8,120	$	87,868	$	84,202	$	75,890	$	27,078	$	99,327	$	42,060	$	424,545
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	40	$	—	$	40
Commercial real estate loans
Pass	$	11,117	$	555,543	$	502,596	$	314,461	$	235,766	$	658,790	$	—	$	2,278,273
Special mention		—		2,163		1,089		761		1,281		7,933		—		13,227
Substandard		—		3,717		471		55		891		8,821		—		13,955
Total	$	11,117	$	561,423	$	504,156	$	315,277	$	237,938	$	675,544	$	—	$	2,305,455
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agricultural loans
Pass	$	39,064	$	78,918	$	18,652	$	4,669	$	2,184	$	1,969	$	—	$	145,456
Special mention		22		744		—		—		74		65		—		905
Substandard		—		379		102		—		5		—		—		486
Total	$	39,086	$	80,041	$	18,754	$	4,669	$	2,263	$	2,034	$	—	$	146,847
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial loans
Pass	$	60,676	$	423,532	$	208,003	$	169,864	$	61,133	$	286,309	$	—	$	1,209,517
Special mention		49		409		7,972		7,760		587		6,470		—		23,247
Substandard		—		385		328		156		7		600		—		1,476
Total	$	60,725	$	424,326	$	216,303	$	177,780	$	61,727	$	293,379	$	—	$	1,234,240
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	13	$	—	$	13
Consumer loans
Pass	$	2,434	$	43,310	$	18,614	$	10,484	$	6,019	$	6,964	$	—	$	87,825
Special mention		—		—		17		—		—		—		—		17
Substandard		2		155		303		39		37		52		—		588
Total	$	2,436	$	43,465	$	18,934	$	10,523	$	6,056	$	7,016	$	—	$	88,430
Current period gross writeoffs	$	—	$	50	$	61	$	1	$	9	$	306	$	—	$	427
Total loans
Pass	$	134,327	$	1,435,092	$	931,043	$	639,336	$	370,452	$	1,131,368	$	42,060	$	4,683,678
Special mention		71		3,614		9,201		8,772		3,225		22,139		—		47,022
Substandard		53		5,606		1,705		773		1,234		20,560		—		29,931
Total	$	134,451	$	1,444,312	$	941,949	$	648,881	$	374,911	$	1,174,067	$	42,060	$	4,760,631
Current period gross writeoffs	$	—	$	50	$	61	$	1	$	9	$	359	$	—	$	480

The following tables present the credit risk profile of the Company’s loan portfolio based on risk rating category as of December 31, 2022 (in thousands):


	Term Loans by Origination Year												Revolving
Risk rating	2022		2021		2020		2019		2018		Prior		Loans		Total
December 31, 2022
Construction and land development loans
Pass	$	63,846	$	39,790	$	12,558	$	15,787	$	1,210	$	10,601	$	—	$	143,792
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		14		—		458		—		472
Total	$	63,846	$	39,790	$	12,558	$	15,801	$	1,210	$	11,059	$	—	$	144,264
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	2	$	—	$	2
Agricultural real estate loans
Pass	$	171,833	$	67,115	$	58,283	$	23,820	$	27,573	$	52,799	$	—	$	401,423
Special mention		1,123		—		490		1,240		273		3,121		—		6,247
Substandard		—		—		—		—		1,383		1,274		—		2,657
Total	$	172,956	$	67,115	$	58,773	$	25,060	$	29,229	$	57,194	$	—	$	410,327
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1-4 family residential property loans
Pass	$	94,377	$	86,717	$	78,977	$	27,580	$	30,809	$	63,050	$	43,722	$	425,232
Special mention		169		218		1		44		238		1,000		—		1,670
Substandard		1,060		566		529		295		2,749		8,079		—		13,278
Total	$	95,606	$	87,501	$	79,507	$	27,919	$	33,796	$	72,129	$	43,722	$	440,180
Current period gross writeoffs	$	—	$	—	$	67	$	13	$	—	$	111	$	—	$	191
Commercial real estate loans
Pass	$	558,921	$	509,614	$	319,049	$	239,564	$	211,505	$	453,076	$	—	$	2,291,729
Special mention		2,187		1,287		769		1,508		952		8,503		—		15,206
Substandard		3,783		478		794		873		5,394		6,100		—		17,422
Total	$	564,891	$	511,379	$	320,612	$	241,945	$	217,851	$	467,679	$	—	$	2,324,357
Current period gross writeoffs	$	250	$	22	$	—	$	—	$	—	$	142	$	—	$	414
Agricultural loans
Pass	$	137,327	$	18,783	$	3,433	$	3,918	$	915	$	254	$	—	$	164,630
Special mention		1,178		—		—		756		66		109		—		2,109
Substandard		53		—		—		46		—		—		—		99
Total	$	138,558	$	18,783	$	3,433	$	4,720	$	981	$	363	$	—	$	166,838
Current period gross writeoffs	$	—	$	93	$	—	$	—	$	—	$	—	$	—	$	93
Commercial and industrial loans
Pass	$	450,001	$	226,038	$	172,208	$	63,906	$	61,929	$	247,404	$	—	$	1,221,486
Special mention		469		640		10,095		570		7,280		158		—		19,212
Substandard		346		418		184		35		157		633		—		1,773
Total	$	450,816	$	227,096	$	182,487	$	64,511	$	69,366	$	248,195	$	—	$	1,242,471
Current period gross writeoffs	$	39	$	311	$	39	$	439	$	23	$	19	$	—	$	870
Consumer loans
Pass	$	48,600	$	21,088	$	12,101	$	7,968	$	1,945	$	5,630	$	—	$	97,332
Special mention		—		18		1		—		5		—		—		24
Substandard		69		246		3		43		52		6		—		419
Total	$	48,669	$	21,352	$	12,105	$	8,011	$	2,002	$	5,636	$	—	$	97,775
Current period gross writeoffs	$	22	$	177	$	89	$	10	$	7	$	1,075	$	—	$	1,380
Total loans
Pass	$	1,524,905	$	969,145	$	656,609	$	382,543	$	335,886	$	832,814	$	43,722	$	4,745,624
Special mention		5,126		2,163		11,356		4,118		8,814		12,891		—		44,468
Substandard		5,311		1,708		1,510		1,306		9,735		16,550		—		36,120
Total	$	1,535,342	$	973,016	$	669,475	$	387,967	$	354,435	$	862,255	$	43,722	$	4,826,212
Current period gross writeoffs	$	311	$	603	$	195	$	462	$	30	$	1,349	$	—	$	2,950

The following table presents the Company’s loan portfolio aging analysis at March 31, 2023 and December 31, 2022 (in thousands):


	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
March 31, 2023
Construction and land development	$	17	$	—	$	463	$	480	$	158,677	$	159,157	$	—
Agricultural real estate		—		—		1		1		401,956		401,957		—
1-4 family residential properties		2,182		13		936		3,131		421,414		424,545		—
Multifamily residential properties		—		—		550		550		301,258		301,808		—
Commercial real estate		268		77		3,107		3,452		2,000,195		2,003,647		—
Loans secured by real estate		2,467		90		5,057		7,614		3,283,500		3,291,114		—
Agricultural loans		—		2		481		483		146,364		146,847		—
Commercial and industrial loans		71		—		930		1,001		1,077,020		1,078,021		—
Consumer loans		420		118		194		732		87,698		88,430		—
All other loans		—		—		—		—		156,219		156,219		—
Total loans	$	2,958	$	210	$	6,662	$	9,830	$	4,750,801	$	4,760,631	$	—
December 31, 2022
Construction and land development	$	20	$	14	$	449	$	483	$	143,781	$	144,264	$	—
Agricultural real estate		20		6		1		27		410,300		410,327		—
1-4 family residential properties		1,706		1,092		896		3,694		436,486		440,180		—
Multifamily residential properties		—		—		548		548		293,798		294,346		—
Commercial real estate		494		205		3,654		4,353		2,025,658		2,030,011		—
Loans secured by real estate		2,240		1,317		5,548		9,105		3,310,023		3,319,128		—
Agricultural loans		—		53		29		82		166,756		166,838		—
Commercial and industrial loans		716		24		854		1,594		1,081,366		1,082,960		—
Consumer loans		326		195		278		799		96,976		97,775		—
All other loans		—		—		—		—		159,511		159,511		—
Total loans	$	3,282	$	1,589	$	6,709	$	11,580	$	4,814,632	$	4,826,212	$	—

Within all loan portfolio segments, loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Impaired loans, excluding certain modified, are placed on nonaccrual status. Impaired loans include nonaccrual loans and loans modified in restructuring where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. It is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being modified remain on nonaccrual status until, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. If the restructured loan is on accrual status prior to being modified, the loan is reviewed to determine if the modified loan should remain on accrual status.

The Company’s policy is to discontinue the accrual of interest income on all loans for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Interest on loans determined to be modified is recognized on an accrual basis in accordance with the restructured terms if the loan is in compliance with the modified terms. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.

The amount of interest income recognized by the Company within the periods stated above was due to loans modified in restructuring that remain on accrual status.

Interest income that would have been recorded under the original terms of such nonaccrual loans totaled $79,000 and $95,000 for the three months ended March 31, 2023 and 2022, respectively.

The Company closely monitors the performance of loans that have been modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table shows the performance of such loans that have been modified in the last twelve months ended March 31, 2023.

A loan is considered to be in payment default once it is 90 days past due under the modified terms. There were no loans modified during the prior twelve months that experienced defaults for three months ended March 31, 2023.

Troubled Debt Restructuring (TDR) Disclosures Prior to the Adoption of ASU 2022-02

There were no loan and lease modifications classified as a TDR during the three months ended March 31, 2022. The classification between nonperforming and performing is determined at the time of modification. Modification programs focus on extending maturity dates or modifying payment patterns with most TDRs experiencing a combination of concessions. Modifications do not result in the contractual forgiveness of principal or interest. There were no modifications during the three months ended March 31, 2022 that resulted in an interest rate below market rate.

There were three loans modified as trouble debt restructuring during the prior twelve months that experienced defaults for the three months ended March 31, 2022. Default occurs when a loan is 90 days or more past due under the modified terms.