Loans (Tables)

3 Months Ended

Mar. 31, 2022

Loans [Abstract]

Loan Portfolio and Allowance for Loan Losses

The following table summarizes the primary segments of the loan portfolio and how those segments are analyzed within the allowance for loan losses as of March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022	Total Loans		Individually evaluated for impairment		Loans acquired with deteriorated credit quality		Collectively evaluated for impairment
Real estate loans:
Residential	$	201,567	$	602	$	12	$	200,953
Commercial		724,876		8,189		2,109		714,578
Agricultural		305,517		5,288		1,606		298,623
Construction		66,738		-		-		66,738
Consumer		21,460		-		-		21,460
Other commercial loans		69,051		612		-		68,439
Other agricultural loans		39,904		921		-		38,983
State and political subdivision loans		49,582		-		-		49,582
Total		1,478,695		15,612		3,727		1,459,356
Allowance for loan losses		17,556		510		-		17,046
Net loans	$	1,461,139	$	15,102	$	3,727	$	1,442,310

December 31, 2021	Total Loans		Individually evaluated for impairment		Loans acquired with deteriorated credit quality		Collectively evaluated for impairment
Real estate loans:
Residential	$	201,097	$	620	$	14	$	200,463
Commercial		687,338		8,381		2,145		676,812
Agricultural		312,011		5,355		1,643		305,013
Construction		55,036		-		-		55,036
Consumer		25,858		-		-		25,858
Other commercial loans		74,585		186		-		74,399
Other agricultural loans		39,852		991		-		38,861
State and political subdivision loans		45,756		-		-		45,756
Total		1,441,533		15,533		3,802		1,422,198
Allowance for loan losses		17,304		121		-		17,183
Net loans	$	1,424,229	$	15,412	$	3,802	$	1,405,015

Accretable Yield for Purchased Credit Impaired Loans

Changes in the accretable yield for PCI loans were as follows for the three months ended March 31, 2022 and 2021 (in thousands):

	Three months ended March 31
	2022			2021
Balance at beginning of period	$	370		$	788
Reclassification of non-accretable discount		228			-
Accretion		(203	)		(100	)
Balance at end of period	$	395		$	688

Loans Acquired with Specific Evidence of Deterioration in Credit Quality

The following table presents additional information regarding loans acquired with specific evidence of deterioration in credit quality under ASC 310-30 (in thousands):

	March 31, 2022		December 31, 2021
Outstanding balance	$	6,584	$	6,159
Carrying amount		3,727		3,802

Impaired Loan Receivables with Associated Allowance Amount

The following table includes the recorded investment and unpaid principal balances for impaired loan receivables by class, excluding PCI loans, with the associated allowance amount, if applicable (in thousands):

March 31, 2022	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate loans:
Mortgages	$	713	$	482	$	44	$	526	$	6
Home Equity		95		35		41		76		5
Commercial		9,180		7,908		281		8,189		56
Agricultural		5,673		5,100		188		5,288		14
Construction		-		-		-		-		-
Consumer		-		-		-		-		-
Other commercial loans		1,241		92		520		612		429
Other agricultural loans		1,241		921		-		921		-
Total	$	18,143	$	14,538	$	1,074	$	15,612	$	510

December 31, 2021	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate loans:
Mortgages	$	697	$	495	$	45	$	540	$	6
Home Equity		97		37		43		80		6
Commercial		9,330		8,096		285		8,381		61
Agricultural		5,694		5,167		188		5,355		14
Construction		-		-		-		-		-
Consumer		-		-		-		-		-
Other commercial loans		813		92		94		186		34
Other agricultural loans		1,274		991		-		991		-
Total	$	17,905	$	14,878	$	655	$	15,533	$	121

The following tables includes the average balance of impaired loan receivables by class and the income recognized on these receivables for the three month periods ended March 31, 2022 and 2021 (in thousands):

	For the Three Months Ended
	March 31, 2022						March 31, 2021
	Average Recorded Investment		Interest Income Recognized		Interest Income Recognized Cash Basis		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized Cash Basis
Real estate loans:
Mortgages	$	531	$	2	$	-	$	851	$	5	$	-
Home Equity		77		1		-		124		1		-
Commercial		8,260		66		-		9,238		67		7
Agricultural		5,316		28		-		4,590		22		-
Consumer		-		-		-		1		-		-
Other commercial loans		326		1		-		1,121		1		-
Other agricultural loans		953		1		-		1,103		2		-
Total	$	15,463	$	99	$	-	$	17,028	$	98	$	7

Financing Receivable Credit Exposures by Internally Assigned Grades

The following tables represent credit exposures by internally assigned grades as of March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022	Pass		Special Mention		Substandard		Doubtful		Loss		Ending Balance
Real estate loans:
Commercial	$	687,595	$	29,919	$	7,362	$	-	$	-	$	724,876
Agricultural		286,986		12,665		5,866		-		-		305,517
Construction		66,738		-		-		-		-		66,738
Other commercial loans		64,635		3,520		860		36		-		69,051
Other agricultural loans		37,989		1,156		759		-		-		39,904
State and political subdivision loans		49,582		-		-		-		-		49,582
Total	$	1,193,525	$	47,260	$	14,847	$	36	$	-	$	1,255,668

December 31, 2021
Real estate loans:
Commercial	$	646,137	$	35,332	$	5,869	$	-	$	-	$	687,338
Agricultural		291,537		15,105		5,369		-		-		312,011
Construction		55,036		-		-		-		-		55,036
Other commercial loans		70,932		3,289		316		48		-		74,585
Other agricultural loans		37,800		1,351		701		-		-		39,852
State and political subdivision loans		45,588		168		-		-		-		45,756
Total	$	1,147,030	$	55,245	$	12,255	$	48	$	-	$	1,214,578

For residential real estate mortgages, home equity and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail below, and all loans past due 90 or more days and still accruing. The following table presents the recorded investment in those loan classes based on payment activity as of March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022	Performing		Non-performing		PCI		Total
Real estate loans:
Mortgages	$	152,183	$	455	$	12	$	152,650
Home Equity		48,917		-		-		48,917
Consumer		21,460		-		-		21,460
Total	$	222,560	$	455	$	12	$	223,027
December 31, 2021	Performing		Non-performing		PCI		Total
Real estate loans:
Mortgages	$	150,320	$	608	$	14	$	150,942
Home Equity		50,122		33		-		50,155
Consumer		25,858		-		-		25,858
Total	$	226,300	$	641	$	14	$	226,955

Aging Analysis of Past Due Loan Receivables

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table includes an aging analysis of the recorded investment of past due loan receivables as of March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022	30-59 Days Past Due		60-89 Days Past Due		90 Days Or Greater		Total Past Due		Current		PCI		Total Loan Receivables		90 Days or Greater and Accruing
Real estate loans:
Mortgages	$	567	$	86	$	207	$	860	$	151,778	$	12	$	152,650	$	12
Home Equity		60		24		-		84		48,833		-		48,917		-
Commercial		97		719		1,940		2,756		720,011		2,109		724,876		-
Agricultural		671		-		1,368		2,039		301,872		1,606		305,517		-
Construction		-		-		-		-		66,738		-		66,738		-
Consumer		186		3		-		189		21,271		-		21,460		-
Other commercial loans		100		313		117		530		68,521		-		69,051		-
Other agricultural loans		-		-		-		-		39,904		-		39,904		-
State and political subdivision loans		-		-		-		-		49,582		-		49,582		-
Total	$	1,681	$	1,145	$	3,632	$	6,458	$	1,468,510	$	3,727	$	1,478,695	$	12
Loans considered non-accrual	$	272	$	457	$	3,620	$	4,349	$	3,461	$	-	$	7,810
Loans still accruing		1,409		688		12		2,109		1,465,049		3,727		1,470,885
Total	$	1,681	$	1,145	$	3,632	$	6,458	$	1,468,510	$	3,727	$	1,478,695

December 31, 2021
Real estate loans:
Mortgages	$	220	$	170	$	209	$	599	$	150,329	$	14	$	150,942	$	13
Home Equity		103		-		33		136		50,019		-		50,155		33
Commercial		127		115		1,969		2,211		682,982		2,145		687,338		-
Agricultural		31		-		1,367		1,398		308,970		1,643		312,011		-
Construction		-		-		-		-		55,036		-		55,036		-
Consumer		163		1		-		164		25,694		-		25,858		-
Other commercial loans		17		10		92		119		74,466		-		74,585		-
Other agricultural loans		10		-		-		10		39,842		-		39,852		-
State and political subdivision loans		-		-		-		-		45,756		-		45,756		-
Total	$	671	$	296	$	3,670	$	4,637	$	1,433,094	$	3,802	$	1,441,533	$	46
Loans considered non-accrual	$	-	$	-	$	3,624	$	3,624	$	3,992	$	-	$	7,616
Loans still accruing		671		296		46		1,013		1,429,102		3,802		1,433,917
Total	$	671	$	296	$	3,670	$	4,637	$	1,433,094	$	3,802	$	1,441,533

Loan Receivables on Nonaccrual Status

The following table reflects the loan receivables, excluding PCI loans, on non-accrual status as of March 31, 2022 and December 31, 2021, respectively. The balances are presented by class of loan receivable (in thousands):

	March 31, 2022		December 31, 2021
Real estate loans:
Mortgages	$	443	$	595
Commercial		2,984		2,945
Agricultural		3,083		3,133
Other commercial loans		567		140
Other agricultural loans		733		803
	$	7,810	$	7,616

Troubled Debt Restructurings on Financing Receivables

There were no loan modifications that were considered TDRs during the three months ended March 31, 2022. Loan modifications that are considered TDRs completed during the three months ended March 31, 2021 were as follows (dollars in thousands):

	For the Three Months Ended March 31, 2021
	Number of contracts				Pre-modification Outstanding Recorded Investment				Post-Modification Outstanding Recorded Investment
	Interest Modification		Term Modification		Interest Modification		Term Modification		Interest Modification		Term Modification
Real estate loans:
Commercial		-		2	$	-	$	290	$	-	$	290
Total		-		2	$	-	$	290	$	-	$	290

Allowance for Loan Losses by Impairment Method

The following table segregates the allowance for loan losses (ALLL) into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of March 31, 2022 and December 31, 2021, respectively (in thousands):

	March 31, 2022						December 31, 2021
	Individually evaluated for impairment		Collectively evaluated for impairment		Total		Individually evaluated for impairment		Collectively evaluated for impairment		Total
Real estate loans:
Residential	$	11	$	1,059	$	1,070	$	12	$	1,135	$	1,147
Commercial		56		8,338		8,394		61		8,038		8,099
Agricultural		14		4,502		4,516		14		4,715		4,729
Construction		-		497		497		-		434		434
Consumer		-		210		210		-		262		262
Other commercial loans		429		951		1,380		34		989		1,023
Other agricultural loans		-		551		551		-		558		558
State and political subdivision loans		-		285		285		-		281		281
Unallocated		-		653		653		-		771		771
Total	$	510	$	17,046	$	17,556	$	121	$	17,183	$	17,304

Roll forward of Allowance for Loan Losses by Portfolio Segment

The following tables roll forward the balance of the ALLL by portfolio segment for the three months ended March 31, 2022 and 2021, respectively (in thousands):

	For the three months ended March 31, 2022
	Balance at December 31, 2021		Charge-offs			Recoveries		Provision			Balance at March 31, 2022
Real estate loans:
Residential	$	1,147	$	-		$	-	$	(77	)	$	1,070
Commercial		8,099		-			-		295			8,394
Agricultural		4,729		-			-		(213	)		4,516
Construction		434		-			-		63			497
Consumer		262		(5	)		5		(52	)		210
Other commercial loans		1,023		-			2		355			1,380
Other agricultural loans		558		-			-		(7	)		551
State and political subdivision loans		281		-			-		4			285
Unallocated		771		-			-		(118	)		653
Total	$	17,304	$	(5	)	$	7	$	250		$	17,556

	For the three months ended March 31, 2021
	Balance at December 31, 2020		Charge-offs			Recoveries		Provision			Balance at March 31, 2021
Real estate loans:
Residential	$	1,174	$	-		$	-	$	(7	)	$	1,167
Commercial		6,216		-			89		378			6,683
Agricultural		4,953		-			-		(36	)		4,917
Construction		122		-			-		29			151
Consumer		321		(4	)		6		(86	)		237
Other commercial loans		1,226		-			4		274			1,504
Other agricultural loans		864		-			-		(75	)		789
State and political subdivision loans		479		-			-		(9	)		470
Unallocated		460		-			-		182			642
Total	$	15,815	$	(4	)	$	99	$	650		$	16,560