Credit Quality Indicators (Tables)

6 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

Risk Category of Loans by Class of Loans

As of June 30, 2023 and December 31, 2022, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
June 30, 2023
Commercial real estate
Owner occupied	$	347,171	$	5,326	$	4,569	$	357,066
Non-owner occupied		646,559		22,362		28,023		696,944
Farmland		189,238		0		2,707		191,945
Other		222,049		7,550		219		229,818
Commercial
Commercial and industrial		347,795		7,142		9,014		363,951
Agricultural		58,869		0		457		59,326
Total loans	$	1,811,681	$	42,380	$	44,989	$	1,899,050

(In Thousands of Dollars)	Pass		Special Mention		Sub standard		Total
December 31, 2022
Commercial real estate
Owner occupied	$	324,979	$	1,193	$	4,285	$	330,457
Non-owner occupied		527,267		25,541		10,236		563,044
Farmland		186,057		0		2,525		188,582
Other		133,218		0		103		133,321
Commercial
Commercial and industrial		282,412		777		11,217		294,406
Agricultural		58,002		250		337		58,589
Total loans	$	1,511,935	$	27,761	$	28,703	$	1,568,399

Investment in Residential, Consumer and Indirect Auto Loans Based on Payment Activity

The following tables present the recorded investment in residential, consumer indirect and direct auto loans based on payment activity as of June 30, 2023 and December 31, 2022. Nonperforming loans are loans past due 90 days or more and still accruing interest and nonaccrual loans.

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
June 30, 2023
Performing	$	846,249	$	137,939	$	233,846	$	25,855	$	8,156
Nonperforming		2,959		628		363		152		3
Total loans	$	849,208	$	138,567	$	234,209	$	26,007	$	8,159

	Residential Real Estate				Consumer
(In Thousands of Dollars)	1-4 Family Residential		Home Equity Lines of Credit		Indirect		Direct		Other
December 31, 2022
Performing	$	472,335	$	131,416	$	204,248	$	16,266	$	7,712
Nonperforming		3,013		793		375		191		2
Total loans	$	475,348	$	132,209	$	204,623	$	16,457	$	7,714

Risk Categories and Year of Origination

The following table presents total loans by risk categories and year of origination.

	Term Loans Amortized Cost Basis by Origination Year
As of June 30, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Commercial real estate
Risk Rating
Pass	$	54,049	$	254,672	$	225,147	$	143,875	$	151,048	$	373,002	$	13,986	$	1,215,779
Special mention		0		0		4,496		12,838		8,515		9,389		0		35,238
Substandard		0		0		1,650		3,841		2,063		24,149		1,108		32,811
Total commercial real estate loans	$	54,049	$	254,672	$	231,293	$	160,554	$	161,626	$	406,540	$	15,094	$	1,283,828
Commercial real estate current period gross write-offs	$	0	$	0	$	0	$	0	$	1	$	156	$	0	$	157
Commercial and industrial
Risk Rating
Pass	$	63,363	$	97,102	$	48,716	$	29,047	$	13,470	$	29,190	$	66,907	$	347,795
Special mention		0		174		616		75		1,038		10		5,229		7,142
Substandard		228		3,408		333		783		294		1,006		2,962		9,014
Total commercial loans	$	63,591	$	100,684	$	49,665	$	29,905	$	14,802	$	30,206	$	75,098	$	363,951
Commercial and industrial current period gross write-offs	$	0	$	95	$	377	$	11	$	16	$	172	$	0	$	671
Agricultural
Risk Rating
Pass	$	18,279	$	53,234	$	32,543	$	41,069	$	21,627	$	64,050	$	17,305	$	248,107
Special mention		0		0		0		0		0		0		0		0
Substandard		0		0		369		216		61		2,390		128		3,164
Total agricultural loans	$	18,279	$	53,234	$	32,912	$	41,285	$	21,688	$	66,440	$	17,433	$	251,271
Agricultural current period gross write-offs	$	0	$	15	$	44	$	0	$	0	$	4	$	0	$	63
Residential real estate
Risk Rating
Pass	$	26,642	$	177,294	$	169,952	$	141,482	$	51,291	$	268,622	$	3,699	$	838,982
Special mention		0		0		0		68		113		159		0		340
Substandard		0		31		455		440		378		8,582		0		9,886
Total residential real estate loans	$	26,642	$	177,325	$	170,407	$	141,990	$	51,782	$	277,363	$	3,699	$	849,208
Residential real estate current period gross write-offs	$	0	$	0	$	0	$	0	$	0	$	82	$	0	$	82
Home equity lines of credit
Risk Rating
Pass	$	0	$	19	$	10	$	47	$	67	$	2,066	$	134,014	$	136,223
Special mention		0		0		0		0		0		0		38		38
Substandard		0		27		50		82		20		2,028		99		2,306
Total home equity lines of credit	$	0	$	46	$	60	$	129	$	87	$	4,094	$	134,151	$	138,567
Home equity lines of credit current period gross write-offs	$	0	$	0	$	0	$	8	$	0	$	4	$	0	$	12
Consumer
Risk Rating
Pass	$	44,887	$	87,410	$	40,831	$	27,009	$	16,462	$	43,017	$	7,843	$	267,459
Substandard		0		168		65		245		176		262		0		916
Total consumer loans	$	44,887	$	87,578	$	40,896	$	27,254	$	16,638	$	43,279	$	7,843	$	268,375
Consumer current period gross write-offs	$	0	$	113	$	46	$	76	$	30	$	157	$	33	$	455

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
Commercial real estate
Risk Rating
Pass	$	188,240	$	174,841	$	120,883	$	138,342	$	89,769	$	256,103	$	17,286	$	985,464
Special mention		0		711		1,861		5,286		624		18,252		0		26,734
Substandard		0		18		256		1,968		267		10,952		1,163		14,624
Total commercial real estate loans	$	188,240	$	175,570	$	123,000	$	145,596	$	90,660	$	285,307	$	18,449	$	1,026,822
Commercial
Risk Rating
Pass	$	100,368	$	45,872	$	34,110	$	16,854	$	13,574	$	14,664	$	56,970	$	282,412
Special mention		0		197		0		0		0		0		580		777
Substandard		3,642		1,331		356		152		110		1,761		3,865		11,217
Total commercial loans	$	104,010	$	47,400	$	34,466	$	17,006	$	13,684	$	16,425	$	61,415	$	294,406
Agricultural
Risk Rating
Pass	$	51,096	$	36,376	$	44,133	$	23,661	$	24,003	$	45,490	$	19,300	$	244,059
Special mention		0		0		0		0		0		0		250		250
Substandard		0		379		235		72		0		2,146		30		2,862
Total agricultural loans	$	51,096	$	36,755	$	44,368	$	23,733	$	24,003	$	47,636	$	19,580	$	247,171
Residential real estate
Risk Rating
Pass	$	83,951	$	112,463	$	76,095	$	31,404	$	22,918	$	135,757	$	3,956	$	466,544
Special mention		0		0		70		118		76		93		0		357
Substandard		0		136		249		121		9		7,932		0		8,447
Total residential real estate loans	$	83,951	$	112,599	$	76,414	$	31,643	$	23,003	$	143,782	$	3,956	$	475,348
Home equity lines of credit
Risk Rating
Pass	$	0	$	10	$	0	$	0	$	16	$	1,394	$	128,622	$	130,042
Special mention		0		0		0		0		0		0		49		49
Substandard		0		13		137		20		0		1,848		100		2,118
Total home equity lines of credit	$	0	$	23	$	137	$	20	$	16	$	3,242	$	128,771	$	132,209
Consumer
Risk Rating
Pass	$	98,530	$	46,945	$	32,284	$	20,849	$	10,918	$	10,942	$	7,302	$	227,770
Special mention		0		0		0		0		0		0		0		0
Substandard		102		113		267		230		109		202		1		1,024
Total consumer loans	$	98,632	$	47,058	$	32,551	$	21,079	$	11,027	$	11,144	$	7,303	$	228,794

Summary of Loan Pools and Methodology Used in Calculation of Allowance for Credit Losses

The following table presents the loan pools and the associated methodology used during the calculation of the allowance for credit losses in 2023.

Portfolio Segments	Loan Pool	Methodology	Loss Drivers
Residential real estate	1-4 Family Residential Real Estate - 1st Liens	Cohort	Credit Loss History
	1-4 Family Residential Real Estate - 2nd Liens	Cohort	Credit Loss History
Home Equity Lines of Credit	Home Equity Lines of Credit	Cohort	Credit Loss History
Consumer Finance	Cash Reserves	Cohort	Credit Loss History
	Direct	Cohort	Credit Loss History
	Indirect	Cohort	Credit Loss History
Commercial	Commercial and Industrial	PD/LGD	Credit Loss History
	Agricultural	PD/LGD	Credit Loss History
	Municipal	PD/LGD	Credit Loss History
Commercial real estate	Owner Occupied	PD/LGD	Credit Loss History
	Non-Owner Occupied	PD/LGD	Credit Loss History
	Multifamily	PD/LGD	Credit Loss History
	Farmland	PD/LGD	Credit Loss History
	Construction	PD/LGD	Credit Loss History

Schedule of Par Value of Purchased Loans

	2023
Par value of acquired loans at acquisition	$	797,616
Net purchase discount		(55,958	)
Allowance for credit losses of PCD loans		(999	)
Purchase price of loans at acquisition	$	740,659

Schedule of Outstanding Balance and Related Allowance on Loans

The outstanding balance at June 30, 2023 and related allowance on PCD loans is as follows:

	Loan Balance		ACL Balance
Commercial real estate
Owner Occupied	$	1,739	$	33
Non-owner Occupied		35,694		1,222
Farmland		13		0
Commercial
Commercial and industrial		2,655		160
Agricultural		149		10
Residential real estate
1-4 family residential		3,512		21
Home equity lines of credit		3		0
Total	$	43,765	$	1,446