Loans (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022	Total Loans		Individually evaluated for impairment		Loans acquired with deteriorated credit quality		Collectively evaluated for impairment
Real estate loans:
Residential	$	203,323	$	676	$	10	$	202,637
Commercial		798,528		5,842		2,035		790,651
Agricultural		313,700		5,225		1,562		306,913
Construction		71,414		-		-		71,414
Consumer		50,319		-		-		50,319
Other commercial loans		65,772		169		-		65,603
Other agricultural loans		32,870		864		-		32,006
State and political subdivision loans		59,450		-		-		59,450
Total		1,595,376		12,776		3,607		1,578,993
Allowance for loan losses		17,570		129		-		17,441
Net loans	$	1,577,806	$	12,647	$	3,607	$	1,561,552

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 and six months ended June 30, 2022 and 2021 (in thousands):

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Balance at beginning of period	$	395		$	688		$	370		$	788
Reclassification of non-accretable discount		-			-			228			-
Accretion		(117	)		(104	)		(320	)		(204	)
Balance at end of period	$	278		$	584		$	278		$	584

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):

	June 30, 2022		December 31, 2021
Outstanding balance	$	6,432	$	6,159
Carrying amount		3,607		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):

June 30, 2022	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate loans:
Mortgages	$	767	$	560	$	42	$	602	$	6
Home Equity		92		33		41		74		5
Commercial		6,895		5,475		367		5,842		77
Agricultural		5,648		5,037		188		5,225		26
Other commercial loans		800		92		77		169		15
Other agricultural loans		1,203		864		-		864		-
Total	$	15,405	$	12,061	$	715	$	12,776	$	129

December 31, 2021
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
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 and six month periods ended June 30, 2022 and 2021 (in thousands):

	For the Six Months Ended
	June 30, 2022						June 30, 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	$	539	$	5	$	-	$	784	$	8	$	-
Home Equity		76		1		-		117		3		-
Commercial		6,669		98		3		9,009		134		15
Agricultural		5,282		57		-		4,543		43		-
Other commercial loans		391		1		-		1,072		1		-
Other agricultural loans		918		2		-		1,093		3		-
Total	$	13,875	$	164	$	3	$	16,619	$	192	$	15

	For the Three Months Ended
	June 30, 2022						June 30, 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	$	547	$	3	$	-	$	718	$	3	$	-
Home Equity		75		-		-		109		2		-
Commercial		5,048		32		3		8,781		67		8
Agricultural		5,248		29		-		4,497		21		-
Other commercial loans		455		-		-		1,023		-		-
Other agricultural loans		883		1		-		1,082		1		-
Total	$	12,256	$	65	$	3	$	16,210	$	94	$	8

Financing Receivable Credit Exposures by Internally Assigned Grades

The following tables represent credit exposures by internally assigned grades as of June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022	Pass		Special Mention		Substandard		Doubtful		Loss		Ending Balance
Real estate loans:
Commercial	$	753,191	$	38,093	$	7,244	$	-	$	-	$	798,528
Agricultural		295,067		12,874		5,759		-		-		313,700
Construction		68,872		2,542		-		-		-		71,414
Other commercial loans		62,144		3,283		311		34		-		65,772
Other agricultural loans		30,608		1,523		739		-		-		32,870
State and political subdivision loans		59,450		-		-		-		-		59,450
Total	$	1,269,332	$	58,315	$	14,053	$	34	$	-	$	1,341,734

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

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 June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022	30-59 Days Past Due		60-89 Days Past Due		90 Days Or Greater		Total Past Due		Current		PCI		Total Loans Receivables		90 Days or Greater and Accruing
Real estate loans:
Mortgages	$	854	$	80	$	196	$	1,130	$	153,190	$	10	$	154,330	$	-
Home Equity		209		9		29		247		48,746		-		48,993		29
Commercial		610		-		2,252		2,862		793,631		2,035		798,528		109
Agricultural		-		-		1,367		1,367		310,771		1,562		313,700		-
Construction		217		-		-		217		71,197		-		71,414		-
Consumer		126		-		1		127		50,192		-		50,319		1
Other commercial loans		-		9		92		101		65,671		-		65,772		-
Other agricultural loans		35		-		-		35		32,835		-		32,870		-
State and political subdivision loans		-		-		-		-		59,450		-		59,450		-
Total	$	2,051	$	98	$	3,937	$	6,086	$	1,585,683	$	3,607	$	1,595,376	$	139
Loans considered non-accrual	$	-	$	79	$	3,798	$	3,877	$	3,374	$	-	$	7,251
Loans still accruing		2,051		19		139		2,209		1,582,309		3,607		1,588,125
Total	$	2,051	$	98	$	3,937	$	6,086	$	1,585,683	$	3,607	$	1,595,376

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 June 30, 2022 and December 31, 2021, respectively. The balances are presented by class of loan receivable (in thousands):

	June 30, 2022		December 31, 2021
Real estate loans:
Mortgages	$	494	$	595
Commercial		2,911		2,945
Agricultural		3,043		3,133
Other commercial loans		126		140
Other agricultural loans		677		803
	$	7,251	$	7,616

Troubled Debt Restructurings on Financing Receivables

Loan modifications that are considered TDRs completed during the three and six months ended June 30, 2022 and the three and six months ended June 30, 2021 were as follows (dollars in thousands):

	For the Three and Six Months Ended June 30, 2022
	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		-		3	$	-	$	1,430	$	-	$	1,430
Total		-		3	$	-	$	1,430	$	-	$	1,430

	For the Three Months Ended June 30, 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		-		1	$	-	$	1,117	$	-	$	1,117
Total		-		1	$	-	$	1,117	$	-	$	1,117

	For the Six Months Ended June 30, 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		-		3		-		1,407		-		1,407
Total		-		3	$	-	$	1,407	$	-	$	1,407

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 June 30, 2022 and December 31, 2021, respectively (in thousands):

	June 30, 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	$	1,004		$	1,015		$	12	$	1,135	$	1,147
Commercial		77		9,139			9,216			61		8,038		8,099
Agricultural		26		4,458			4,484			14		4,715		4,729
Construction		-		563			563			-		434		434
Consumer		-		464			464			-		262		262
Other commercial loans		15		1,158			1,173			34		989		1,023
Other agricultural loans		-		446			446			-		558		558
State and political subdivision loans		-		323			323			-		281		281
Unallocated		-		(114	)		(114	)		-		771		771
Total	$	129	$	17,441		$	17,570		$	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 and six months ended June 30, 2022 and 2021, respectively (in thousands):

	For the three months ended June 30, 2022
	Balance at March 31, 2022		Charge-offs			Recoveries		Provision			Balance at June 30, 2022
Real estate loans:
Residential	$	1,070	$	-		$	-	$	(55	)	$	1,015
Commercial		8,394		-			-		822			9,216
Agricultural		4,516		-			-		(32	)		4,484
Construction		497		-			-		66			563
Consumer		210		(12	)		5		261			464
Other commercial loans		1,380		(434	)		5		222			1,173
Other agricultural loans		551		-			-		(105	)		446
State and political subdivision loans		285		-			-		38			323
Unallocated		653		-			-		(767	)		(114	)
Total	$	17,556	$	(446	)	$	10	$	450		$	17,570

	For the three months ended June 30, 2021
	Balance at March 31, 2021		Charge-offs			Recoveries		Provision			Balance at June 30, 2021
Real estate loans:
Residential	$	1,167	$	-		$	-	$	7		$	1,174
Commercial		6,683		-			-		423			7,106
Agricultural		4,917		-			-		(211	)		4,706
Construction		151		-			-		345			496
Consumer		237		(5	)		6		(153	)		85
Other commercial loans		1,504		(133	)		3		(46	)		1,328
Other agricultural loans		789		-			-		(206	)		583
State and political subdivision loans		470		-			-		(66	)		404
Unallocated		642		-			-		407			1,049
Total	$	16,560	$	(138	)	$	9	$	500		$	16,931

	For the six months ended June 30, 2022
	Balance at December 31, 2021		Charge-offs			Recoveries		Provision			Balance at June 30, 2022
Real estate loans:
Residential	$	1,147	$	-		$	-	$	(132	)	$	1,015
Commercial		8,099		-			-		1,117			9,216
Agricultural		4,729		-			-		(245	)		4,484
Construction		434		-			-		129			563
Consumer		262		(17	)		10		209			464
Other commercial loans		1,023		(434	)		7		577			1,173
Other agricultural loans		558		-			-		(112	)		446
State and political subdivision loans		281		-			-		42			323
Unallocated		771		-			-		(885	)		(114	)
Total	$	17,304	$	(451	)	$	17	$	700		$	17,570

	For the six months ended June 30, 2021
	Balance at December 31, 2020		Charge-offs			Recoveries		Provision			Balance at June 30, 2021
Real estate loans:
Residential	$	1,174	$	-		$	-	$	-		$	1,174
Commercial		6,216		-			89		801			7,106
Agricultural		4,953		-			-		(247	)		4,706
Construction		122		-			-		374			496
Consumer		321		(9	)		12		(239	)		85
Other commercial loans		1,226		(133	)		7		228			1,328
Other agricultural loans		864		-			-		(281	)		583
State and political subdivision loans		479		-			-		(75	)		404
Unallocated		460		-			-		589			1,049
Total	$	15,815	$	(142	)	$	108	$	1,150		$	16,931