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.

A summary of loans at March 31, 2022 and December 31, 2021 follows (in thousands):

Loans expected to be sold are classified as held for sale in the consolidated financial statements and are recorded at the lower of aggregate cost or 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 $15.2 million and $14.7 million

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, 2022, the Company’s loan portfolio included $402.7 million of loans to borrowers whose businesses are directly related to agriculture. Of this amount, $283.6 million was concentrated in corn and other grain farming. Total loans to borrowers whose businesses are directly related to agriculture decreased $28.1 million from $430.8 million at December 31, 2021 due to seasonal timing of cash flow requirements. Loans concentrated in corn and other grain farming decreased $13.8 million from $297.4 million at December 31, 2021. 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 $208.8 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 $874.1 million of loans to lessors of non-residential buildings, and $537.7 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 troubled debt restructurings, 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 troubled debt restructurings. 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. In March 2020, in response to the COVID-19 outbreak, its significant disruptions in the U.S. economy and impacts on local markets, First Mid Bank offered a 90-day commercial deferral program, primarily to hotel and restaurant borrowers. In accordance with interagency guidance issued in March 2020, these short-term deferrals are not considered troubled debt restructurings. These deferrals were, however, considered in the factors used to estimate the required allowance for credit losses for non-individually evaluated loans. Other COVID-19 related impacts considered included revenue losses of businesses required to restrict or cease services, income loss to workers laid off as a result of COVID-19 restrictions, various federal and state government stimulus programs and additional deferral programs offered by First Mid Bank beginning in April 2020. Other 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 remained very low. Current activity in this industry was deemed essential and has continued during COVID-19. While staffing shortages and supply chain disruptions cause risk in this segment, most projects are associated with financially strong borrowers. The qualitative factor for this segment was 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 a slight decrease to the qualitative factor for this segment.

1- 4 Family Residential Properties Loans. COVID-19 has impacted the finances of consumers from layoffs and furloughs resulting from employers that must reduce or suspend operations. Increased risk in this segment includes consumer ability to make mortgage and rent payments. Some of this impact was offset by governmental actions such as stimulus payments and extended unemployment benefits. First Mid Bank also offered short-term loan payment deferral to borrowers in this segment. There was no change to the qualitative factors for this segment.

Commercial Real Estate Loans. This segment includes the Company's majority of exposure to the hotel industry which has been significantly impacted by COVID-19 events. Other impacted industries in this segment include restaurants and retail establishments. The qualitative factors on both non-owner occupied and owner-occupied loans for this segment were not changed.

Agricultural Loans. Losses in this segment are very low. Commodity prices have been elevated and yields have been strong. The qualitative factor of this segment was decreased slightly.

Commercial and Industrial Loans. The COVID-19 impacts include forced closures and scaled-back services for many industries within this segment including retailers, restaurants, and video gaming establishments. Some of this risk was offset by government relief programs as well as, First Mid Bank's payment deferral program. The qualitative factor for this segment was not changed.

Consumer Loans. The financial status of many borrowers was impacted by COVID-19 events including layoffs and reduced hours. Some of this impact was offset by government stimulus programs, increased paid leave and increased and extended unemployment benefits. Additionally, First Mid Bank has offered a short-term payment deferral program. The qualitative factor for this segment was not changed.

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. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date. Accordingly, on January 1, 2020, the amortized cost basis of the PCD loans were adjusted to reflect the addition of $833,000 to the allowance for credit losses.

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, 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	$	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

The following tables present the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2021 and for the year ended December 31, 2021 (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, 2021
Beginning balance (prior to adoption of ASC 326)	$	1,666	$	1,084	$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Initial allowance on loans purchased with credit deterioration		261		44		328			646		—			795		—		2,074
Provision for credit loss expense		359		500		617			5,902		(645	)		4,674		729		12,136
Loans charged off		—		—		182			480		—			18		288		968
Recoveries collected		—		—		8			9		—			18		231		266
Ending balance	$	2,286	$	1,628	$	3,093		$	25,737	$	881		$	18,954	$	2,839	$	55,418

Twelve months ended December 31, 2021
Beginning balance (prior to adoption of ASC 326)	$	1,666	$	1,084	$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Impact of adopting ASC 326		261		44		328			646		—			795		—		2,074
Provision for credit loss expense		21		129		(160	)		6,415		(544	)		7,940		1,350		15,151
Loans charged off		205		—		371			535		—			3,118		1,405		5,634
Recoveries collected		—		—		211			60		1			139		743		1,154
Ending balance	$	1,743	$	1,257	$	2,330		$	26,246	$	983		$	19,241	$	2,855	$	54,655

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 timeframes 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 following table presents the amortized cost basis of collateral-dependent loans by class of loans that were individually evaluated to determine expected credit losses, and the related allowance for credit losses, as of March 31, 2022 (in thousands):

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, 2022 (in thousands):

	Term Loans by Origination Year												Revolving
Risk rating	2022		2021		2020		2019		2018		Prior		Loans		Total
March 31, 2022
Construction and land development loans
Pass	$	7,333	$	47,220	$	33,352	$	26,873	$	2,599	$	13,533	$	—	$	130,910
Special mention		—		107		—		—		—		—		—		107
Substandard		—		—		—		—		—		487		—		487
Total	$	7,333	$	47,327	$	33,352	$	26,873	$	2,599	$	14,020	$	—	$	131,504
Agricultural real estate loans
Pass	$	27,996	$	91,907	$	64,989	$	26,672	$	39,318	$	18,288	$	427	$	269,597
Special mention		825		46		259		3,499		390		5,504		—		10,523
Substandard		—		—		—		—		244		629		—		873
Total	$	28,821	$	91,953	$	65,248	$	30,171	$	39,952	$	24,421	$	427	$	280,993
1-4 family residential property loans
Pass	$	17,076	$	95,294	$	101,585	$	38,664	$	49,229	$	92,832	$	2,898	$	397,578
Special mention		—		158		—		1,915		1,796		3,098		40		7,007
Substandard		46		367		499		492		1,366		9,245		632		12,647
Total	$	17,122	$	95,819	$	102,084	$	41,071	$	52,391	$	105,175	$	3,570	$	417,232
Commercial real estate loans
Pass	$	157,560	$	563,350	$	409,771	$	317,733	$	224,746	$	614,381	$	218	$	2,287,759
Special mention		1,733		1,431		1,101		1,887		1,268		17,831		—		25,251
Substandard		3,889		499		851		704		5,824		10,470		—		22,237
Total	$	163,182	$	565,280	$	411,723	$	320,324	$	231,838	$	642,682	$	218	$	2,335,247
Agricultural loans
Pass	$	35,055	$	48,882	$	11,860	$	4,502	$	2,330	$	2,067	$	—	$	104,696
Special mention		3,859		9,913		346		2,648		129		64		—		16,959
Substandard		30		6		—		17		—		—		—		53
Total	$	38,944	$	58,801	$	12,206	$	7,167	$	2,459	$	2,131	$	—	$	121,708
Commercial and industrial loans
Pass	$	116,681	$	326,191	$	149,215	$	88,980	$	58,513	$	292,322	$	39,894	$	1,071,796
Special mention		370		694		274		1,639		174		1,023		—		4,174
Substandard		—		587		360		32		128		1,115		—		2,222
Total	$	117,051	$	327,472	$	149,849	$	90,651	$	58,815	$	294,460	$	39,894	$	1,078,192
Consumer loans
Pass	$	11,315	$	29,356	$	19,264	$	16,484	$	5,049	$	5,321	$	2,475	$	89,264
Special mention		—		64		32		35		8		—		—		139
Substandard		12		96		23		22		59		70		—		282
Total	$	11,327	$	29,516	$	19,319	$	16,541	$	5,116	$	5,391	$	2,475	$	89,685
Total loans
Pass	$	373,016	$	1,202,200	$	790,036	$	519,908	$	381,784	$	1,038,744	$	45,912	$	4,351,600
Special mention		6,787		12,413		2,012		11,623		3,765		27,520		40		64,160
Substandard		3,977		1,555		1,733		1,267		7,621		22,016		632		38,801
Total	$	383,780	$	1,216,168	$	793,781	$	532,798	$	393,170	$	1,088,280	$	46,584	$	4,454,561

The following tables present the credit risk profile of the Company’s loan portfolio based on risk rating category as of December 31, 2021 (in thousands):

	Term Loans by Origination Year												Revolving
Risk rating	2021		2020		2019		2018		2017		Prior		Loans		Total
December 31, 2021
Construction and land development loans
Pass	$	38,656	$	34,774	$	23,505	$	34,358	$	3,760	$	9,433	$	—	$	144,486
Special mention		110		—		—		—		—		—		—		110
Substandard		—		—		—		483		—		39		—		522
Total	$	38,766	$	34,774	$	23,505	$	34,841	$	3,760	$	9,472	$	—	$	145,118
Agricultural real estate loans
Pass	$	78,793	$	64,159	$	25,713	$	30,203	$	12,142	$	54,808	$	—	$	265,818
Special mention		872		259		4,028		384		69		6,087		—		11,699
Substandard		—		—		392		187		57		1,119		—		1,755
Total	$	79,665	$	64,418	$	30,133	$	30,774	$	12,268	$	62,014	$	—	$	279,272
1-4 family residential property loans
Pass	$	78,889	$	94,404	$	35,554	$	44,248	$	30,735	$	52,131	$	42,800	$	378,761
Special mention		234		—		1,934		499		2,601		1,196		41		6,505
Substandard		355		496		1,534		1,302		3,458		7,250		652		15,047
Total	$	79,478	$	94,900	$	39,022	$	46,049	$	36,794	$	60,577	$	43,493	$	400,313
Commercial real estate loans
Pass	$	568,200	$	417,334	$	299,973	$	174,448	$	150,811	$	304,585	$	—	$	1,915,351
Special mention		3,185		1,206		1,836		1,295		10,609		8,632		—		26,763
Substandard		2,007		714		6,242		1,179		4,646		8,238		—		23,026
Total	$	573,392	$	419,254	$	308,051	$	176,922	$	166,066	$	321,455	$	—	$	1,965,140
Agricultural loans
Pass	$	105,378	$	17,903	$	5,612	$	2,822	$	924	$	1,316	$	—	$	133,955
Special mention		13,725		436		2,648		150		13		64		—		17,036
Substandard		350		18		—		—		—		125		—		493
Total	$	119,453	$	18,357	$	8,260	$	2,972	$	937	$	1,505	$	—	$	151,484
Commercial and industrial loans
Pass	$	279,814	$	167,662	$	119,702	$	76,022	$	22,888	$	302,962	$	—	$	969,050
Special mention		613		399		1,463		182		477		819		—		3,953
Substandard		506		34		133		621		24		1,433		—		2,751
Total	$	280,933	$	168,095	$	121,298	$	76,825	$	23,389	$	305,214	$	—	$	975,754
Consumer loans
Pass	$	27,948	$	19,033	$	16,978	$	5,505	$	4,297	$	1,244	$	—	$	75,005
Special mention		68		54		38		9		—		—		—		169
Substandard		585		58		308		678		43		1,596		—		3,268
Total	$	28,601	$	19,145	$	17,324	$	6,192	$	4,340	$	2,840	$	—	$	78,442
Total loans
Pass	$	1,177,678	$	815,269	$	527,037	$	367,606	$	225,557	$	726,479	$	42,800	$	3,882,426
Special mention		18,807		2,354		11,947		2,519		13,769		16,798		41		66,235
Substandard		3,803		1,320		8,609		4,450		8,228		19,800		652		46,862
Total	$	1,200,288	$	818,943	$	547,593	$	374,575	$	247,554	$	763,077	$	43,493	$	3,995,523

The following table presents the Company’s loan portfolio aging analysis at March 31, 2022 and December 31, 2021 (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, 2022
Construction and land development	$	93	$	12	$	203	$	308	$	131,196	$	131,504	$	—
Agricultural real estate		243		139		1,813		2,195		278,798		280,993		—
1-4 family residential properties		2,080		253		1,644		3,977		413,255		417,232		—
Multifamily residential properties		—		—		580		580		369,346		369,926		—
Commercial real estate		2,317		—		11,305		13,622		1,951,699		1,965,321		—
Loans secured by real estate		4,733		404		15,545		20,682		3,144,294		3,164,976		—
Agricultural loans		—		—		321		321		121,387		121,708		—
Commercial and industrial loans		572		54		1,486		2,112		933,342		935,454		—
Consumer loans		271		213		119		603		89,082		89,685		—
All other loans		—		—		—		—		142,738		142,738		—
Total loans	$	5,576	$	671	$	17,471	$	23,718	$	4,430,843	$	4,454,561	$	—
December 31, 2021
Construction and land development	$	159	$	199	$	203	$	561	$	144,557	$	145,118	$	—
Agricultural real estate		—		222		1		223		279,049		279,272		—
1-4 family residential properties		2,532		914		2,012		5,458		394,855		400,313		—
Multifamily residential properties		—		—		1,676		1,676		297,266		298,942		—
Commercial real estate		8,930		640		2,484		12,054		1,654,144		1,666,198		—
Loans secured by real estate		11,621		1,975		6,376		19,972		2,769,871		2,789,843		—
Agricultural loans		—		10		588		598		150,886		151,484		—
Commercial and industrial loans		381		302		1,156		1,839		830,169		832,008		—
Consumer loans		388		47		118		553		77,889		78,442		—
All other loans		1,854		—		—		1,854		141,892		143,746		—
Total loans	$	14,244	$	2,334	$	8,238	$	24,816	$	3,970,707	$	3,995,523	$	—

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 troubled debt restructured loans, are placed on nonaccrual status. Impaired loans include nonaccrual loans and loans modified in troubled debt restructurings 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 troubled debt restructurings 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 troubled debt restructurings that remain on accrual status.

The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated for which no allowance was recorded as of March 31, 2022 and December 31, 2021 (in thousands). There were no loans past due over eighty-nine days that were still accruing.

Interest income that would have been recorded under the original terms of such nonaccrual loans totaled $95,000 and $154,000 for the three months ended March 31, 2022 and 2021, respectively.

The balance of troubled debt restructurings ("TDRs") at March 31, 2022 and December 31, 2021 was $5.5 million and $5.8 million, respectively. There was $581,000 and $765,000 in specific reserves established with respect to these loans as of March 31, 2022 and December 31, 2021, respectively. As troubled debt restructurings, these loans are included in nonperforming loans. The modification of the terms of these loans included one or a combination of the following: a reduction of stated interest rate of the loan; an extension of the maturity date and change in payment terms; or a permanent reduction of the recorded investment in the loan.

The following table presents the Company’s recorded balance of troubled debt restructurings at March 31, 2022 and December 31, 2021 (in thousands).

The following table presents loans modified as TDRs during the three months ended March 31, 2022, as a result of various modified loan factors (in thousands). The change in the recorded investment from pre-modification to post- modification was not material.

A loan is considered to be in payment default once it is 90 days past due under the modified terms. There were three loans modified as troubled debt restructurings during the prior twelve months that experienced defaults for three months ended March 31, 2022. There was one loan modified as troubled debt restructuring during the prior twelve months that experienced defaults as of December 31, 2021.

The balance of real estate owned includes $4,794,000 and $4,984,000 of foreclosed real estate properties recorded as a result of obtaining physical possession of the property at March 31, 2022 and December 31, 2021, respectively. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure procedures are in process was $410,000 and $411,000 at March 31, 2022 and December 31, 2021, respectively.

The Company has acquired loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans at acquisition date is as follows (in thousands):