ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (Tables)

6 Months Ended

Jun. 30, 2023

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

The following tables present the activity in the allowance for credit losses by portfolio segment for the periods ended:


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Three Months Ended June 30, 2023
Beginning balance, April 1	$	31,190	$	29,036	$	4,621	$	1,034	$	3,398	$	1,096	$	840	$	71,215
Provision for credit losses	(272)		1,593		(219)		86		51		50		(489)		800
Loans charged-off	(7)		0		0		0		(14)		(369)		0		(390)
Recoveries	67		284		0		0		13		69		0		433
Net loans (charged-off) recovered	60		284		0		0		(1)		(300)		0		43
Ending balance	$	30,978	$	30,913	$	4,402	$	1,120	$	3,448	$	846	$	351	$	72,058


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Three Months Ended June 30, 2022
Beginning balance, April 1	$	31,322	$	26,257	$	4,761	$	1,058	$	2,606	$	1,040	$	482	$	67,526
Provision for credit losses	(139)		191		(8)		(345)		34		102		165		0
Loans charged-off	(13)		0		0		0		0		(85)		0		(98)
Recoveries	25		0		0		0		34		36		0		95
Net loans (charged-off) recovered	12		0		0		0		34		(49)		0		(3)
Ending balance	$	31,195	$	26,448	$	4,753	$	713	$	2,674	$	1,093	$	647	$	67,523


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Six Months Ended June 30, 2023
Beginning balance, January 1	$	35,290	$	27,394	$	4,429	$	917	$	3,001	$	1,021	$	554	$	72,606
Provision for credit losses	1,232		3,235		(27)		203		445		265		(203)		5,150
Loans charged-off	(5,651)		0		0		0		(14)		(621)		0		(6,286)
Recoveries	107		284		0		0		16		181		0		588
Net loans (charged-off) recovered	(5,544)		284		0		0		2		(440)		0		(5,698)
Ending balance	$	30,978	$	30,913	$	4,402	$	1,120	$	3,448	$	846	$	351	$	72,058


(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Six Months Ended June 30, 2022
Beginning balance, January 1	$	30,595	$	26,535	$	5,034	$	1,146	$	2,866	$	1,147	$	450	$	67,773
Provision for credit losses	591		510		(281)		(433)		(214)		47		197		417
Loans charged-off	(32)		(597)		0		0		(22)		(187)		0		(838)
Recoveries	41		0		0		0		44		86		0		171
Net loans (charged-off) recovered	9		(597)		0		0		22		(101)		0		(667)
Ending balance	$	31,195	$	26,448	$	4,753	$	713	$	2,674	$	1,093	$	647	$	67,523

Summary of Risk Category of Loans by Loan Segment and Origination Date and Credit Quality Indicators

The following table summarizes the risk category of loans by loan segment and origination date as of June 30, 2023:


(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Term Total		Revolving		Total
Commercial and industrial loans:
Working capital lines of credit loans:
Pass	$	231	$	2,042	$	2,468	$	1,366	$	0	$	0	$	6,107	$	535,802	$	541,909
Special Mention	0		0		0		0		0		0		0		69,844		69,844
Substandard	0		200		75		0		250		0		525		6,448		6,973


Total	231		2,242		2,543		1,366		250		0		6,632		612,094		618,726
Working capital lines of credit loans:
Current period gross write offs	0		0		0		0		0		0		0		115		115
Non-working capital loans:
Pass	106,680		267,890		107,070		73,313		38,285		17,517		610,755		203,682		814,437
Special Mention	0		429		1,356		2,696		2,818		6,333		13,632		5,679		19,311
Substandard	226		4,525		1,120		4,064		11		657		10,603		398		11,001

Not Rated	1,012		2,505		1,179		1,051		268		67		6,082		0		6,082
Total	107,918		275,349		110,725		81,124		41,382		24,574		641,072		209,759		850,831
Non-working capital loans:
Current period gross write offs	0		5,400		0		0		118		0		5,518		18		5,536
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass	23,520		15,289		10,218		13,306		179		0		62,512		511,070		573,582
Special Mention	0		0		0		0		0		0		0		14,521		14,521



Total	23,520		15,289		10,218		13,306		179		0		62,512		525,591		588,103
Construction and land development loans:
Current period gross write offs	0		0		0		0		0		0		0		0		0
Owner occupied loans:
Pass	88,769		131,307		161,898		135,249		66,660		136,902		720,785		57,223		778,008
Special Mention	0		702		9,148		0		2,257		11,890		23,997		0		23,997
Substandard	225		279		0		1,483		359		1,161		3,507		0		3,507


Total	88,994	132,288	171,046	136,732	69,276	149,953	748,289	57,223	805,512
Owner occupied loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Nonowner occupied loans:
Pass	61,069	165,517	122,798	131,928	89,591	62,994	633,897	79,639	713,536
Special Mention	4,264	0	6,446	0	0	0	10,710	0	10,710



Total	65,333	165,517	129,244	131,928	89,591	62,994	644,607	79,639	724,246
Nonowner occupied loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Multifamily loans:
Pass	78,926	38,445	9,134	36,289	33,831	30,441	227,066	7,444	234,510
Special Mention	19,794	0	0	0	0	0	19,794	0	19,794



Total	98,720	38,445	9,134	36,289	33,831	30,441	246,860	7,444	254,304
Multifamily loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Agri-business and agricultural loans:
Loans secured by farmland:
Pass	15,727	33,900	26,271	29,075	10,112	23,210	138,295	38,369	176,664
Special Mention	0	0	0	0	12	0	12	0	12
Substandard	0	0	0	0	0	115	115	0	115


Total	15,727	33,900	26,271	29,075	10,124	23,325	138,422	38,369	176,791
Loans secured by farmland:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Loans for agricultural production:
Pass	25,929	8,801	28,747	26,880	4,111	11,513	105,981	91,211	197,192
Special Mention	0	0	211	352	0	0	563	500	1,063



Total	25,929	8,801	28,958	27,232	4,111	11,513	106,544	91,711	198,255
Loans for agricultural production:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Other commercial loans:
Pass	6,213	26,450	39,302	15,524	111	8,059	95,659	21,202	116,861
Special Mention	0	0	0	1,103	0	2,793	3,896	0	3,896



Total	6,213	26,450	39,302	16,627	111	10,852	99,555	21,202	120,757
Other commercial loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans:
Pass	5,795	10,782	12,147	10,249	4,647	6,286	49,906	4,607	54,513
Special Mention	0	0	0	535	0	0	535	0	535
Substandard	0	0	96	131	0	263	490	0	490

Not Rated	29,953	53,199	40,652	17,810	4,440	27,166	173,220	0	173,220
Total	35,748	63,981	52,895	28,725	9,087	33,715	224,151	4,607	228,758
Closed end first mortgage loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Open end and junior lien loans:
Pass	318	136	516	345	0	26	1,341	8,803	10,144

Substandard	0	0	0	0	28	48	76	133	209

Not Rated	13,104	36,410	10,690	2,105	2,824	2,483	67,616	107,610	175,226
Total	13,422	36,546	11,206	2,450	2,852	2,557	69,033	116,546	185,579
Open end and junior lien loans:
Current period gross write offs	0	0	14	0	0	0	14	0	14
Residential construction loans:




Not Rated	1,041	13,374	1,604	871	276	1,321	18,487	0	18,487
Total	1,041	13,374	1,604	871	276	1,321	18,487	0	18,487
Residential construction loans:
Current period gross write offs	0	0	0	0	0	0	0	0	0
Other consumer loans:
Pass	1,955	827	1,586	383	0	0	4,751	16,589	21,340

Substandard	0	0	0	0	5	0	5	0	5

Not Rated	14,116	20,994	12,049	7,402	2,411	2,762	59,734	10,832	70,566
Total	16,071	21,821	13,635	7,785	2,416	2,762	64,490	27,421	91,911
Other consumer loans:


Current period gross write offs	0		191		91		6		212		1		501		120		621

Total period gross write offs	0		5,591		105		6		330		1		6,033		253		6,286

Total Loans	$	498,867	$	834,003	$	606,781	$	513,510	$	263,486	$	354,007	$	3,070,654	$	1,791,606	$	4,862,260

The following table summarizes the risk category of loans by loan segment and origination date as of December 31, 2022:


(dollars in thousands)	2022		2021		2020		2019		2018		Prior		Term Total		Revolving		Total
Commercial and industrial loans:
Working capital lines of credit loans:
Pass	$	2,207	$	2,718	$	1,601	$	0	$	0	$	0	$	6,526	$	597,108	$	603,634
Special Mention	0		0		0		0		0		0		0		36,410		36,410
Substandard	200		0		0		300		0		0		500		10,495		10,995


Total	2,407		2,718		1,601		300		0		0		7,026		644,013		651,039
Non-working capital loans:
Pass	272,273		124,600		91,850		47,711		9,981		13,670		560,085		240,490		800,575
Special Mention	448		1,620		0		109		159		2,961		5,297		2,153		7,450
Substandard	11,831		872		5,021		194		1,351		3,979		23,248		4,171		27,419

Not Rated	2,891		1,550		1,254		413		120		23		6,251		0		6,251
Total	287,443		128,642		98,125		48,427		11,611		20,633		594,881		246,814		841,695
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass	26,889		19,944		14,026		356		0		0		61,215		453,953		515,168




Total	26,889		19,944		14,026		356		0		0		61,215		453,953		515,168
Owner occupied loans:
Pass	113,656		179,014		139,880		97,353		65,519		97,335		692,757		40,533		733,290
Special Mention	2,960		7,608		0		446		1,491		8,054		20,559		0		20,559
Substandard	308		105		1,491		373		1,161		229		3,667		0		3,667


Total	116,924		186,727		141,371		98,172		68,171		105,618		716,983		40,533		757,516
Nonowner occupied loans:
Pass	194,294		125,190		134,661		91,907		15,109		64,874		626,035		68,603		694,638
Special Mention	0		11,024		0		0		0		0		11,024		0		11,024



Total	194,294		136,214		134,661		91,907		15,109		64,874		637,059		68,603		705,662
Multifamily loans:
Pass	38,460		25,741		36,929		35,695		2,046		28,866		167,737		7,349		175,086
Special Mention	21,855		0		0		0		0		0		21,855		0		21,855



Total	60,315		25,741		36,929		35,695		2,046		28,866		189,592		7,349		196,941
Agri-business and agricultural loans:
Loans secured by farmland:
Pass	38,344		28,684		29,741		9,656		8,145		19,638		134,208		63,094		197,302
Special Mention	260		0		1,676		1,780		0		15		3,731		0		3,731
Substandard	0		0		0		0		0		145		145		0		145


Total	38,604		28,684		31,417		11,436		8,145		19,798		138,084		63,094		201,178
Loans for agricultural production:
Pass	6,040		30,262		22,167		3,625		9,248		4,539		75,881		143,599		219,480
Special Mention	947		243		7,262		928		0		0		9,380		2,129		11,509



Total	6,987		30,505		29,429		4,553		9,248		4,539		85,261		145,728		230,989
Other commercial loans:
Pass	27,097		4,815		17,911		147		931		10,985		61,886		48,295		110,181
Special Mention	0		0		0		0		0		3,160		3,160		0		3,160



Total	27,097		4,815		17,911		147		931		14,145		65,046		48,295		113,341
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans:
Pass	8,768		12,809		12,289		4,805		4,045		3,860		46,576		5,634		52,210


Special Mention	0		0		552		0		0		0		552		0		552
Substandard	0		0		0		0		83		1,944		2,027		0		2,027

Not Rated	57,404		44,331		20,023		5,936		2,970		27,004		157,668		0		157,668
Total	66,172		57,140		32,864		10,741		7,098		32,808		206,823		5,634		212,457
Open end and junior lien loans:
Pass	137		541		357		63		75		0		1,173		5,841		7,014

Substandard	0		0		0		31		49		0		80		111		191

Not Rated	44,472		13,597		3,014		3,616		1,476		2,252		68,427		101,750		170,177
Total	44,609		14,138		3,371		3,710		1,600		2,252		69,680		107,702		177,382
Residential construction loans:




Not Rated	14,463		2,167		897		291		129		1,223		19,170		0		19,170
Total	14,463		2,167		897		291		129		1,223		19,170		0		19,170
Other consumer loans:
Pass	1,344		1,841		432		600		0		948		5,165		16,152		21,317

Substandard	0		0		0		210		0		0		210		0		210

Not Rated	24,395		14,563		9,168		3,606		2,755		1,352		55,839		10,492		66,331
Total	25,739		16,404		9,600		4,416		2,755		2,300		61,214		26,644		87,858
TOTAL	$	911,943	$	653,839	$	552,202	$	310,151	$	126,843	$	297,056	$	2,852,034	$	1,858,362	$	4,710,396

Schedule of Aging of the Amortized Cost Basis In Past Due Loans

The following table presents the aging of the amortized cost basis in past due loans as of June 30, 2023 by class of loans and loans past due 90 days or more and still accruing by class of loan:


(dollars in thousands)	Loans Not Past Due		30-89 Days Past Due		Greater than 89 Days Past Due and Accruing		Total Accruing		Total Nonaccrual		Nonaccrual With No Allowance For Credit Loss		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	612,932	$	373	$	0	$	607,884	$	5,421	$	75	$	618,726
Non-working capital loans	841,990		0		0		833,149		8,841		695		850,831
Commercial real estate and multi-family residential loans:
Construction and land development loans	588,103		0		0		588,103		0		0		588,103
Owner occupied loans	802,589		0		0		799,666		2,923		1,440		805,512
Nonowner occupied loans	724,246		0		0		724,246		0		0		724,246
Multifamily loans	254,304		0		0		254,304		0		0		254,304
Agri-business and agricultural loans:
Loans secured by farmland	176,635		41		0		176,561		115		0		176,791
Loans for agricultural production	198,255		0		0		198,255		0		0		198,255
Other commercial loans	120,757		0		0		120,757		0		0		120,757
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	227,988		268		8		227,770		494		343		228,758
Open end and junior lien loans	185,060		312		0		185,165		207		207		185,579
Residential construction loans	18,487		0		0		18,487		0		0		18,487
Other consumer loans	91,694		213		0		91,903		4		4		91,911
Total	$	4,843,040	$	1,207	$	8	$	4,826,250	$	18,005	$	2,764	$	4,862,260

The following table presents the aging of the amortized cost basis in past due loans as of December 31, 2022 by class of loans and loans past due 90 days or more and still accruing by class of loan:


(dollars in thousands)	Loans Not Past Due		30-89 Days Past Due		Greater than 89 Days Past Due and Accruing		Total Accruing		Total Nonaccrual		Nonaccrual With No Allowance For Credit Loss		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	649,529	$	68	$	0	$	649,597	$	1,442	$	0	$	651,039
Non-working capital loans	830,033		39		1		830,073		11,622		727		841,695
Commercial real estate and multi-family residential loans:
Construction and land development loans	515,168		0		0		515,168		0		0		515,168
Owner occupied loans	754,451		0		0		754,451		3,065		1,469		757,516
Nonowner occupied loans	705,662		0		0		705,662		0		0		705,662
Multifamily loans	196,941		0		0		196,941		0		0		196,941
Agri-business and agricultural loans:
Loans secured by farmland	201,033		0		0		201,033		145		0		201,178
Loans for agricultural production	230,989		0		0		230,989		0		0		230,989
Other commercial loans	113,341		0		0		113,341		0		0		113,341
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	211,736		306		122		212,164		293		225		212,457
Open end and junior lien loans	176,758		436		0		177,194		188		188		177,382
Residential construction loans	19,170		0		0		19,170		0		0		19,170
Other consumer loans	87,333		316		0		87,649		209		6		87,858
Total	$	4,692,144	$	1,165	$	123	$	4,693,432	$	16,964	$	2,615	$	4,710,396

Schedule of Amortized Cost Basis Of Collateral Dependent Loans

The following tables present the amortized cost basis of collateral dependent loans by class of loan as of:


	June 30, 2023
(dollars in thousands)	Real Estate		General Business Assets		Other		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	50	$	5,221	$	0	$	5,271
Non-working capital loans	474		8,043		229		8,746
Commercial real estate and multi-family residential loans:
Owner occupied loans	638		1,483		1,161		3,282

Agri-business and agricultural loans:
Loans secured by farmland	0		115		0		115
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	494		0		0		494
Open end and junior lien loans	207		0		0		207
Other consumer loans	0		0		4		4
Total	$	1,863	$	14,862	$	1,394	$	18,119


	December 31, 2022
(dollars in thousands)	Real Estate		General Business Assets		Other		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	50	$	5,402	$	0	$	5,452
Non-working capital loans	544		18,109		229		18,882
Commercial real estate and multi-family residential loans:
Owner occupied loans	413		1,491		1,161		3,065

Agri-business and agricultural loans:
Loans secured by farmland	0		145		0		145
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,030		0		0		2,030
Open end and junior lien loans	188		0		0		188
Other consumer loans	0		0		7		7
Total	$	3,225	$	25,147	$	1,397	$	29,769

Financing Receivable, Troubled Debt Restructuring

The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivables is also presented below:


(dollars in thousands)	Combination Principal Forgiveness, Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
Three Months Ended June 30, 2023
Commercial and industrial loans:

Non-working capital loans	$	1,600	0.20	%


(dollars in thousands)	Combination Principal Forgiveness, Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
Six Months Ended June 30, 2023
Commercial and industrial loans:

Non-working capital loans	$	1,600	0.20	%

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and six months ended June 30, 2023:

(dollars in thousands)

Principal Forgiveness

Weighted-Average Interest Rate Reduction

Weighted-Average Term Extension

Total Class of Financing Receivable

Three Months Ended June 30, 2023

Commercial and industrial loans:

Non-working capital loans

9,380

Prime+0.75%

reduced to

1.00% Fixed

260 months

0.20