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ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY
 3 Months Ended
Mar. 31, 2024
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY  
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY
The Company maintains an allowance for credit losses to provide for expected credit losses. Losses are charged against the allowance when management believes that the principal is uncollectable. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance are made for specific loans and for pools of similar types of loans, although the entire allowance is available for any loan that, in management’s judgment, should be charged against the allowance. A provision for credit losses is taken based on management’s ongoing evaluation of the appropriate allowance balance. A formal evaluation of the adequacy of the credit loss allowance is conducted monthly. The ultimate recovery of all loans is susceptible to future market factors beyond the Company’s control.
The level of credit loss provision is influenced by growth in the overall loan portfolio, emerging market risk, emerging concentration risk, commercial loan focus and large credit concentration, new industry lending activity, general economic conditions and historical loss analysis. In addition, management gives consideration to changes in the facts and circumstances
of watch list credits, which includes the security position of the borrower, in determining the appropriate level of the credit loss provision. Furthermore, management’s overall view on credit quality is a factor in the determination of the provision.
The determination of the appropriate allowance is inherently subjective, as it requires significant estimates by management. The Company has an established process to determine the adequacy of the allowance for credit losses that generally includes consideration of changes in the nature and volume of the loan portfolio and overall portfolio quality, along with current and forecasted economic conditions that may affect borrowers’ ability to repay. Consideration is not limited to these factors although they represent the most commonly cited factors. To determine the specific allocation levels for individual credits, management considers the current valuation of collateral and the amounts and timing of expected future cash flows as the primary measures. Management also considers trends in adversely classified loans based upon an ongoing review of those credits. With respect to pools of similar loans, an appropriate level of general allowance is determined by portfolio segment using a probability of default-loss given default (“PD/LGD”) model, subject to a floor. A default can be triggered by one of several different asset quality factors, including past due status, nonaccrual status, material modification status or if the loan has had a charge-off. This PD is then combined with a LGD derived from historical charge-off data to construct a default rate. This loss rate is then supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, particularly the unemployment rate forecast from the Federal Open Market Committee’s Summary of Economic Projections, and other environmental factors based on the risks present for each portfolio segment. These environmental factors include consideration of the following: levels of, and trends in, delinquencies and nonperforming loans; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedure, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. As a result of this detailed process, the allowance results in two forms of allocations, specific and general. These two components represent the total allowance for credit losses deemed adequate to cover probable losses inherent in the loan portfolio.
Commercial loans are subject to a dual standardized grading process administered by the credit administration function. These grade assignments are performed independent of each other and a consensus is reached by credit administration and the loan review officer. Specific allowances are established in cases where management has identified significant conditions or circumstances related to an individual credit that indicate it should be evaluated on an individual basis. Considerations with respect to specific allocations for these individual credits include, but are not limited to, the following: (a) the sufficiency of the customer’s cash flow or net worth to repay the loan; (b) the adequacy of the discounted value of collateral relative to the loan balance; (c) whether the loan has been criticized in a regulatory examination; (d) whether the loan is nonperforming; (e) any other reasons the ultimate collectability of the loan may be in question; or (f) any unique loan characteristics that require special monitoring.
Allocations are also applied to categories of loans considered not to be individually analyzed, but for which the rate of loss is expected to be consistent with or greater than historical averages. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. These general pooled loan allocations are performed for portfolio segments of commercial and industrial; commercial real estate, multi-family, and construction; agri-business and agricultural; other commercial loans; and consumer 1-4 family mortgage and other consumer loans. General allocations of the allowance are determined by a historical loss rate based on the calculation of each pool’s probability of default-loss given default, subject to a floor. The length of the historical period for each pool is based on the average life of the pool. The historical loss rates are supplemented with consideration of economic conditions and portfolio trends.
Due to the imprecise nature of estimating the allowance for credit losses, the Company’s allowance for credit losses includes an immaterial unallocated component. The unallocated component of the allowance for credit losses incorporates the Company’s judgmental determination of potential expected losses that may not be fully reflected in other allocations. As a practical expedient, the Company has elected to disclose accrued interest separately from loan principal balances on the consolidated balance sheet. Additionally, when a loan is placed on non-accrual, interest payments are reversed through interest income.
For off balance sheet credit exposures outlined in the ASU at 326-20-30-11, it is the Company’s position that nearly all of the unfunded amounts on lines of credit are unconditionally cancellable, and therefore not subject to having a liability recorded.
The following tables present the activity in the allowance for credit losses by portfolio segment for the periods ended:
(dollars in thousands)Commercial and IndustrialCommercial Real Estate and Multifamily ResidentialAgri-business and AgriculturalOther CommercialConsumer 1-4 Family MortgageOther ConsumerUnallocatedTotal
Three Months Ended March 31, 2024
                
Beginning balance, January 1$30,338 $31,335 $4,150 $1,129 $3,474 $1,174 $372 $71,972 
Provision for credit losses542 717 (38)(107)21 256 129 1,520 
Loans charged-off(194)0 0 0 0 (310)0 (504)
Recoveries34 26 0 0 23 109 0 192 
Net loans (charged-off) recovered(160)26 0 0 23 (201)0 (312)
Ending balance$30,720 $32,078 $4,112 $1,022 $3,518 $1,229 $501 $73,180 
(dollars in thousands)Commercial and IndustrialCommercial Real Estate and Multifamily ResidentialAgri-business and AgriculturalOther CommercialConsumer 1-4 Family MortgageOther ConsumerUnallocatedTotal
Three Months Ended March 31, 2023
                
Beginning balance, January 1$35,290 $27,394 $4,429 $917 $3,001 $1,021 $554 $72,606 
Provision for credit losses1,504 1,642 192 117 394 215 286 4,350 
Loans charged-off(5,644)0 0 0 0 (252)0 (5,896)
Recoveries40 0 0 0 3 112 0 155 
Net loans (charged-off) recovered(5,604)0 0 0 3 (140)0 (5,741)
Ending balance$31,190 $29,036 $4,621 $1,034 $3,398 $1,096 $840 $71,215 
Credit Quality Indicators
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, credit documentation, public information and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000.
The Company uses the following definitions for risk ratings:
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 Company’s credit position at some future date.
Substandard. Loans classified as Substandard are inadequately protected by the current net worth 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 Company 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 characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
Loans are considered to be "Pass" rated when they are reviewed as part of the previously described process and do not meet the criteria above, which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans, which are evaluated individually and listed with “Not Rated” loans. Loans listed as Not Rated are consumer loans or commercial loans with consumer characteristics included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.
The following table summarizes the risk category of loans by loan segment and year of origination as of March 31, 2024:
(dollars in thousands)20242023202220212020PriorTerm TotalRevolvingTotal
Commercial and industrial loans:                  
Working capital lines of credit loans:                  
Pass$0 $173 $1,910 $2,085 $1,014 $0 $5,182 $578,879 $584,061 
Special Mention0 0 0 0 0 0 0 44,314 44,314 
Substandard0 0 0 0 0 125 125 17,956 18,081 
Total0 173 1,910 2,085 1,014 125 5,307 641,149 646,456 
Working capital lines of credit loans:
Current period gross write offs0 0 94 0 0 0 94 87 181 
Non-working capital loans:
Pass29,281 205,939 199,954 80,369 46,724 35,984 598,251 190,808 789,059 
Special Mention586 3,077 10,126 955 1,293 4,593 20,630 4,317 24,947 
Substandard0 3,674 1,604 674 3,681 270 9,903 396 10,299 
Not Rated273 2,481 1,773 729 611 136 6,003 0 6,003 
Total30,140 215,171 213,457 82,727 52,309 40,983 634,787 195,521 830,308 
Non-working capital loans:
Current period gross write offs0 0 0 0 0 0 0 13 13 
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass19,348 43,392 12,546 47,129 0 175 122,590 534,622 657,212 
Total19,348 43,392 12,546 47,129 0 175 122,590 534,622 657,212 
Construction and land development loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Owner occupied loans:
Pass11,403 141,477 133,033 153,999 128,260 168,796 736,968 58,965 795,933 
Special Mention0 7,510 15,265 4,867 0 3,582 31,224 0 31,224 
Substandard0 351 236 2,134 1,471 1,499 5,691 0 5,691 
Total11,403 149,338 148,534 161,000 129,731 173,877 773,883 58,965 832,848 
Owner occupied loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Nonowner occupied loans:
Pass56,730 133,775 156,608 110,545 127,439 115,982 701,079 29,333 730,412 
Special Mention586 4,453 0 6,161 0 2,223 13,423 0 13,423 
Total57,316 138,228 156,608 116,706 127,439 118,205 714,502 29,333 743,835 
Nonowner occupied loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Multifamily loans:
Pass21,016 90,723 22,315 8,985 35,305 24,943 203,287 5,804 209,091 
Special Mention30,588 0 0 0 0 0 30,588 0 30,588 
Total51,604 90,723 22,315 8,985 35,305 24,943 233,875 5,804 239,679 
Multifamily loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Agri-business and agricultural loans:
Loans secured by farmland:
Pass3,516 23,636 31,737 24,413 27,560 25,108 135,970 31,201 167,171 
Substandard0 0 0 0 0 96 96 0 96 
Total3,516 23,636 31,737 24,413 27,560 25,204 136,066 31,201 167,267 
Loans secured by farmland:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Loans for agricultural production:
Pass1,142 28,938 19,910 26,414 24,782 12,545 113,731 86,270 200,001 
Special Mention0 0 0 182 0 0 182 500 682 
Substandard0 0 0 0 0 0 0 0 0 
Doubtful0 0 0 0 0 0 0 0 0 
Not Rated0 0 0 0 0 0 0 0 0 
Total1,142 28,938 19,910 26,596 24,782 12,545 113,913 86,770 200,683 
Loans for agricultural production:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Other commercial loans:
Pass150 6,798 26,338 33,783 13,061 6,712 86,842 31,102 117,944 
Special Mention0 0 0 0 0 2,230 2,230 0 2,230 
Total150 6,798 26,338 33,783 13,061 8,942 89,072 31,102 120,174 
Other commercial loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans:
Pass5,928 10,099 10,300 12,237 7,113 7,967 53,644 6,473 60,117 
Special Mention0 0 0 0 510 0 510 0 510 
Substandard0 87 0 93 123 228 531 0 531 
Not Rated3,871 64,742 49,563 37,397 16,804 26,741 199,118 0 199,118 
Total9,799 74,928 59,863 49,727 24,550 34,936 253,803 6,473 260,276 
Closed end first mortgage loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Open end and junior lien loans:
Pass0 775 0 478 327 6 1,586 9,349 10,935 
Substandard0 107 21 21 0 131 280 100 380 
Not Rated5,616 22,446 26,928 7,466 1,288 3,793 67,537 112,000 179,537 
Total5,616 23,328 26,949 7,965 1,615 3,930 69,403 121,449 190,852 
Open end and junior lien loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Residential construction loans:
Not Rated681 2,712 3,726 1,473 819 1,465 10,876 0 10,876 
Total681 2,712 3,726 1,473 819 1,465 10,876 0 10,876 
Residential construction loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Other consumer loans:
Pass1,121 994 769 1,277 275 0 4,436 12,221 16,657 
Substandard0 190 33 34 0 0 257 0 257 
Not Rated6,607 30,095 15,759 9,109 5,352 2,952 69,874 10,305 80,179 
Total7,728 31,279 16,561 10,420 5,627 2,952 74,567 22,526 97,093 
Other consumer loans:
Current period gross write offs1 73 136 20 0 26 256 54 310 
Total Loans$198,443 $828,644 $740,454 $573,009 $443,812 $448,282 $3,232,644 $1,764,915 $4,997,559 
Total period gross write offs$1 $73 $230 $20 $0 $26 $350 $154 $504 
As of March 31, 2024, $1.2 million in PPP loans were included in the "Pass" category of non-working capital commercial and industrial loans. These loans were included in this risk rating category because they are fully guaranteed by the Small Business Administration ("SBA").
The following table summarizes the risk category of loans by loan segment and year of origination as of December 31, 2023:
(dollars in thousands)20232022202120202019PriorTerm TotalRevolvingTotal
Commercial and industrial loans:                  
Working capital lines of credit loans:                  
Pass$193 $1,876 $2,214 $1,132 $0 $50 $5,465 $532,086 $537,551 
Special Mention0 0 0 0 0 0 0 46,498 46,498 
Substandard0 200 0 0 125 0 325 20,516 20,841 
Total193 2,076 2,214 1,132 125 50 5,790 599,100 604,890 
Working capital lines of credit loans:
Current period gross write offs0 0 75 0 139 0 214 327 541 
Non-working capital loans:
Pass199,071 224,333 85,273 49,999 28,773 10,501 597,950 171,264 769,214 
Special Mention4,038 9,577 1,051 2,498 2,306 4,298 23,768 5,477 29,245 
Substandard3,754 1,612 683 3,892 51 218 10,210 397 10,607 
Not Rated2,585 1,999 881 707 162 18 6,352 0 6,352 
Total209,448 237,521 87,888 57,096 31,292 15,035 638,280 177,138 815,418 
Non-working capital loans:
Current period gross write offs0 5,445 0 178 129 0 5,752 48 5,800 
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass50,693 15,558 17,655 0 177 0 84,083 547,570 631,653 
Total50,693 15,558 17,655 0 177 0 84,083 547,570 631,653 
Construction and land development loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Owner occupied loans:
Pass144,411 132,850 156,680 132,407 61,415 118,406 746,169 40,288 786,457 
Special Mention7,597 686 4,913 0 1,394 2,245 16,835 14,739 31,574 
Substandard362 250 3,325 1,474 345 1,161 6,917 0 6,917 
Total152,370 133,786 164,918 133,881 63,154 121,812 769,921 55,027 824,948 
Owner occupied loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Nonowner occupied loans:
Pass123,633 158,415 112,582 134,050 87,288 66,755 682,723 27,860 710,583 
Special Mention4,503 0 6,257 0 0 2,246 13,006 0 13,006 
Total128,136 158,415 118,839 134,050 87,288 69,001 695,729 27,860 723,589 
Nonowner occupied loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Multifamily loans:
Pass90,954 23,315 9,042 35,648 13,971 14,609 187,539 45,987 233,526 
Special Mention19,671 0 0 0 0 0 19,671 0 19,671 
Total110,625 23,315 9,042 35,648 13,971 14,609 207,210 45,987 253,197 
Multifamily loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Agri-business and agricultural loans:
Loans secured by farmland:
Pass24,503 32,060 25,308 27,924 9,104 19,160 138,059 24,724 162,783 
Substandard0 0 0 0 0 100 100 0 100 
Total24,503 32,060 25,308 27,924 9,104 19,260 138,159 24,724 162,883 
Loans secured by farmland:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Loans for agricultural production:
Pass28,657 13,589 27,175 25,504 3,533 10,429 108,887 116,406 225,293 
Special Mention0 0 187 0 0 0 187 500 687 
Total28,657 13,589 27,362 25,504 3,533 10,429 109,074 116,906 225,980 
Loans for agricultural production:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Other commercial loans:
Pass7,058 26,918 33,247 13,684 90 7,332 88,329 29,819 118,148 
Special Mention0 0 0 0 0 2,419 2,419 0 2,419 
Total7,058 26,918 33,247 13,684 90 9,751 90,748 29,819 120,567 
Other commercial loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans:
Pass9,910 10,541 12,486 8,614 3,924 4,625 50,100 8,330 58,430 
Special Mention0 0 0 519 0 0 519 0 519 
Substandard87 0 96 123 0 253 559 0 559 
Not Rated64,233 51,018 38,014 17,432 4,314 23,225 198,236 0 198,236 
Total74,230 61,559 50,596 26,688 8,238 28,103 249,414 8,330 257,744 
Closed end first mortgage loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Open end and junior lien loans:
Pass557 137 491 335 0 6 1,526 8,689 10,215 
Substandard108 0 23 0 26 48 205 68 273 
Not Rated24,792 29,648 8,471 1,554 2,286 1,962 68,713 112,371 181,084 
Total25,457 29,785 8,985 1,889 2,312 2,016 70,444 121,128 191,572 
Open end and junior lien loans:
Current period gross write offs0 50 14 0 0 0 64 99 163 
Residential construction loans:
Not Rated1,525 2,982 1,515 839 263 1,220 8,344 0 8,344 
Total1,525 2,982 1,515 839 263 1,220 8,344 0 8,344 
Residential construction loans:
Current period gross write offs0 0 0 0 0 0 0 0 0 
Other consumer loans:
Pass1,082 789 1,391 301 0 0 3,563 11,894 15,457 
Substandard40 34 35 0 2 0 111 0 111 
Not Rated32,481 17,585 9,994 6,008 1,611 1,957 69,636 10,545 80,181 
Total33,603 18,408 11,420 6,309 1,613 1,957 73,310 22,439 95,749 
Other consumer loans:
Current period gross write offs16 258 90 8 212 1 585 243 828 
Total loans$846,498 $755,972 $558,989 $464,644 $221,160 $293,243 $3,140,506 $1,776,028 $4,916,534 
Total current period gross write offs$16 $5,753 $179 $186 $480 $1 $6,615 $717 $7,332 
As of December 31, 2023, $1.3 million in PPP loans were included in the "Pass" category of non-working capital commercial and industrial loans. These loans were included in this risk rating category because they are fully guaranteed by the SBA.
Nonaccrual and Past Due Loans:
The Company does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and future payments are reasonably assured.
The following table presents the aging of the amortized cost basis in past due loans as of March 31, 2024 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 Due30-89 Days Past DueGreater than 89 Days Past Due and AccruingTotal AccruingTotal NonaccrualNonaccrual With No Allowance For Credit LossTotal
Commercial and industrial loans:            
Working capital lines of credit loans$644,813 $101 $0 $644,914 $1,516 $0 $646,430 
Non-working capital loans820,224 1,350 0 821,574 8,760 243 830,334 
Commercial real estate and multi-family residential loans:
Construction and land development loans657,212 0 0 657,212 0 0 657,212 
Owner occupied loans829,629 0 0 829,629 3,219 1,161 832,848 
Nonowner occupied loans743,835 0 0 743,835 0 0 743,835 
Multifamily loans239,679 0 0 239,679 0 0 239,679 
Agri-business and agricultural loans:
Loans secured by farmland167,171 0 0 167,171 96 0 167,267 
Loans for agricultural production200,683 0 0 200,683 0 0 200,683 
Other commercial loans120,174 0 0 120,174 0 0 120,174 
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans258,505 1,233 7 259,745 531 302 260,276 
Open end and junior lien loans190,318 154 0 190,472 380 359 190,852 
Residential construction loans10,876 0 0 10,876 0 0 10,876 
Other consumer loans96,497 339 0 96,836 257 1 97,093 
Total$4,979,616 $3,177 $7 $4,982,800 $14,759 $2,066 $4,997,559 
An insignificant amount of interest income was recognized on nonaccrual loans during the three month period ended March 31, 2024.
The following table presents the aging of the amortized cost basis in past due loans as of December 31, 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 Due30-89 Days Past DueGreater than 89 Days Past Due and AccruingTotal AccruingTotal NonaccrualNonaccrual With No Allowance For Credit LossTotal
Commercial and industrial loans:            
Working capital lines of credit loans$602,236 $0 $0 $602,236 $2,654 $0 $604,890 
Non-working capital loans805,305 1,372 0 806,677 8,741 244 815,418 
Commercial real estate and multi-family residential loans:
Construction and land development loans631,653 0 0 631,653 0 0 631,653 
Owner occupied loans821,701 0 0 821,701 3,247 1,161 824,948 
Nonowner occupied loans723,589 0 0 723,589 0 0 723,589 
Multifamily loans253,197 0 0 253,197 0 0 253,197 
Agri-business and agricultural loans:
Loans secured by farmland162,783 0 0 162,783 100 0 162,883 
Loans for agricultural production225,980 0 0 225,980 0 0 225,980 
Other commercial loans120,567 0 0 120,567 0 0 120,567 
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans256,016 1,142 27 257,185 559 329 257,744 
Open end and junior lien loans190,956 344 0 191,300 272 164 191,572 
Residential construction loans8,344 0 0 8,344 0 0 8,344 
Other consumer loans95,135 502 0 95,637 112 3 95,749 
Total$4,897,462 $3,360 $27 $4,900,849 $15,685 $1,901 $4,916,534 
An insignificant amount of interest income was recognized on nonaccrual loans was insignificant during the year ended December 31, 2023.
When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value.
The following tables present the amortized cost basis of collateral dependent loans by class of loan as of:
March 31, 2024
(dollars in thousands)Real EstateGeneral
Business
 Assets		OtherTotal
Commercial and industrial loans:      
Working capital lines of credit loans$50 $1,516 $0 $1,566 
Non-working capital loans37 8,222 400 8,659 
Commercial real estate and multi-family residential loans:
Owner occupied loans574 1,471 1,161 3,206 
Agri-business and agricultural loans:
Loans secured by farmland0 96 0 96 
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans488 0 43 531 
Open end and junior lien loans273 0 0 273 
Other consumer loans0 0 63 63 
Total$1,422 $11,305 $1,667 $14,394 
December 31, 2023
(dollars in thousands)Real EstateGeneral
Business
 Assets		OtherTotal
Commercial and industrial loans:      
Working capital lines of credit loans$50 $2,454 $0 $2,504 
Non-working capital loans40 8,202 400 8,642 
Commercial real estate and multi-family residential loans:
Owner occupied loans595 1,474 1,161 3,230 
Agri-business and agricultural loans:
Loans secured by farmland0 100 0 100 
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans559 0 0 559 
Open end and junior lien loans164 0 0 164 
Other consumer loans0 0 112 112 
Total$1,408 $12,230 $1,673 $15,311 
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
The allowance for credit losses incorporates an estimate of lifetime expected credit losses using historical loss information. The Company uses a probability of default/loss given default model to determine an estimate which is recorded for each asset upon origination. Occasionally, the Company has reason to modify certain terms of loans for borrowers experiencing financial distress by providing the following forms of relief: forgiveness of loan principal, extension of repayment terms, interest rate reduction or an other than insignificant payment delay. The Company can make any or all of these types of concessions as part of such modifications. Since an estimate for historical losses is already included as a component of the allowance for credit losses, a change to the allowance for credit losses is generally not recorded at the time of such modifications.
During the three months ended March 31, 2024 and 2023, there were no material modifications made to borrowers experiencing financial difficulty.
The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the last 12 months at March 31, 2024:
(dollars in thousands)30-59 Days Past Due60-89 Days Past DueGreater Than 89 Days Past DueTotal Past Due
Commercial and industrial loans:  
Working capital lines of credit loans$941 $0 $0 $941 
Total commercial and industrial loans941 0 0 941 
Total$941 $0 $0 $941 
One working capital line of credit loan receiving a modification due to borrower financial difficulty within the past 12 months was 30-59 days past due at March 31, 2024. The delinquency for this line of credit was due to ongoing negotiations with the borrower for an additional restructuring of the outstanding debt for the admission of new partners into the borrower's business.
At March 31, 2024, no loans receiving a modification due to borrower financial difficulty within the last twelve months experienced a payment default.
Upon the Company's determination that a modified loan (or portion thereof) has subsequently been deemed uncollectible, the loan (or a portion thereof) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.