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Loans (Tables)

9 Months Ended

Sep. 30, 2023

Loan balances as of September 30, 2023 and December 31, 2022 are summarized below:


	(In Thousands)
Loans:	September 30, 2023			December 31, 2022
Consumer Real Estate	$	512,973		$	494,423
Agricultural Real Estate		225,672			220,819
Agricultural		123,735			128,733
Commercial Real Estate		1,304,118			1,152,603
Commercial and Industrial		250,891			242,360
Consumer		83,024			89,147
Other		31,083			29,818
		2,531,496			2,357,903
Less: Net deferred loan fees and costs		(1,890	)		(1,516	)
		2,529,606			2,356,387
Less: Allowance for credit losses		(25,277	)		(20,313	)
Loans - Net	$	2,504,329		$	2,336,074

Distribution of Fixed Rate Loans and Variable Rate Loans by Major Loan Category

The distribution of fixed rate loans and variable rate loans by major loan category is as follows as of September 30, 2023 and December 31, 2022:


	(In Thousands)
	September 30, 2023				December 31, 2022
	Fixed		Variable		Fixed		Variable
Consumer Real Estate	$	330,689	$	182,284	$	354,420	$	140,003
Agricultural Real Estate		128,681		96,991		144,702		76,117
Agricultural		57,301		66,434		52,867		75,866
Commercial Real Estate		1,013,000		291,118		941,927		210,676
Commercial and Industrial		141,010		109,881		130,513		111,847
Consumer		82,956		68		88,972		175
Other		21,499		9,584		20,029		9,789

Contractual Aging of Recorded Investment in Past Due Loans by Portfolio Classification of Loans

The following table represents the contractual aging of the recorded investment (in thousands) in past due loans by portfolio classification of loans as of September 30, 2023 and December 31, 2022, net of deferred loan fees and costs:


September 30, 2023	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing

Consumer Real Estate	$	2,116	$	559	$	346	$	3,021	$	509,969	$	512,990	$	-
Agricultural Real Estate		1,227		-		60		1,287		224,083		225,370		-
Agricultural		60		1,498		1,524		3,082		120,889		123,971		-
Commercial Real Estate		503		5		255		763		1,300,851		1,301,614		-
Commercial and Industrial		16		-		855		871		280,968		281,839		-
Consumer		104		67		7		178		83,644		83,822		-
Total	$	4,026	$	2,129	$	3,047	$	9,202	$	2,520,404	$	2,529,606	$	-


December 31, 2022	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing

Consumer Real Estate	$	1,536	$	635	$	90	$	2,261	$	492,162	$	494,423	$	-
Agricultural Real Estate		118		2		1,550		1,670		218,844		220,514		-
Agricultural		433		-		152		585		128,341		128,926		-
Commercial Real Estate		74		-		180		254		1,150,257		1,150,511		-
Commercial and Industrial		953		-		182		1,135		270,984		272,119		-
Consumer		83		37		-		120		89,774		89,894		-
Total	$	3,197	$	674	$	2,154	$	6,025	$	2,350,362	$	2,356,387	$	-

Amortized Cost of Nonaccrual Loans by Portfolio Class of Loans

The following tables present the amortized cost of nonaccrual loans by class of loans as of September 30, 2023 and the recorded investment of nonaccrual loans by class of loans as of December 31, 2022:


	(In Thousands)
	September 30, 2023
	Nonaccrual				Loans Past
	With No				Due Over
	Allowance				89 Days
	for Credit Loss		Nonaccrual		Still Accruing

Consumer Real Estate	$	689	$	689	$	-
Agricultural Real Estate		15,948		15,948		-
Agricultural		4,695		4,695		-
Commercial Real Estate		254		254		-
Commercial & Industrial		854		854		-
Consumer		7		7		-
Total	$	22,447	$	22,447	$	-


	(In Thousands)
	December 31, 2022

Consumer Real Estate	$	612
Agricultural Real Estate		1,921
Agricultural		152
Commercial Real Estate		903
Commercial & Industrial		1,096
Consumer		5
Total	$	4,689

Risk Category of Loans by Portfolio Class

The following table represents the risk category of loans by portfolio class, net of deferred fees and costs, based on the most recent analysis performed as of December 31, 2022:


	(In Thousands)
	Agricultural				Commercial		Commercial
	Real Estate		Agricultural		Real Estate		and Industrial		Other
December 31, 2022
1-2	$	9,912	$	5,857	$	8,718	$	780	$	-
3		47,405		33,671		370,035		67,506		10,921
4		146,143		88,992		737,745		167,291		18,897
5		10,389		228		9,751		3,592		-
6		6,665		178		24,262		3,132		-
7		-		-		-		-		-
8		-		-		-		-		-
Total	$	220,514	$	128,926	$	1,150,511	$	242,301	$	29,818

Recorded Investment for Consumer Loans, Credit Quality based on Status of Loan and Payment Activity

The following tables present the recorded investment in those classes based on payment activity and assigned risk grading as of December 31, 2022.


	(In Thousands)
	Consumer
	Real Estate
	December 31, 2022
Grade
Pass (1-4)	$	492,575
Special Mention (5)		676
Substandard (6)		1,172
Doubtful (7)		-
Total	$	494,423


	(In Thousands)
	Consumer
	December 31, 2022
Performing	$	89,853
Nonperforming		41
Total	$	89,894

Loan Balances Based on Year of Origination

The following table reflects loan balances as of September 30, 2023 based on year of origination:


	(In Thousands)
	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans
											Term		Amortized		Grand
	2023		2022		2021		2020		Prior		Total		Cost Basis		Total

Consumer Real Estate
Risk Rating
Pass (1-4)	$	60,417	$	92,081	$	92,221	$	84,478	$	131,759	$	460,956	$	49,921	$	510,877
Special Mention (5)		-		-		-		-		68		68		-		68
Substandard (6)		-		40		640		-		1,337		2,017		28		2,045
Doubtful (7)		-		-		-		-		-		-		-		-
Total Consumer Real Estate	$	60,417	$	92,121	$	92,861	$	84,478	$	133,164	$	463,041	$	49,949	$	512,990
Gross charge-offs YTD	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Agricultural Real Estate
Risk Rating
Pass (1-4)	$	24,866	$	39,508	$	25,649	$	26,348	$	87,181	$	203,552	$	97	$	203,649
Special Mention (5)		-		249		16		-		5,307		5,572		-		5,572
Substandard (6)		-		-		12,196		187		3,766		16,149		-		16,149
Doubtful (7)		-		-		-		-		-		-		-		-
Total Agricultural Real Estate	$	24,866	$	39,757	$	37,861	$	26,535	$	96,254	$	225,273	$	97	$	225,370
Gross charge-offs YTD	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Agricultural
Risk Rating
Pass (1-4)	$	15,439	$	22,361	$	9,654	$	4,977	$	6,281	$	58,712	$	59,510	$	118,222
Special Mention (5)		-		-		-		-		-		-		-		-
Substandard (6)		516		634		2,011		1,090		-		4,251		1,498		5,749
Doubtful (7)		-		-		-		-		-		-		-		-
Total Agricultural	$	15,955	$	22,995	$	11,665	$	6,067	$	6,281	$	62,963	$	61,008	$	123,971
Gross charge-offs YTD	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-


	(In Thousands)
	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans
											Term		Amortized		Grand
	2023		2022		2021		2020		Prior		Total		Cost Basis		Total

Commercial Real Estate
Risk Rating
Pass (1-4)	$	159,888	$	448,961	$	252,124	$	127,752	$	254,825	$	1,243,550	$	-	$	1,243,550
Special Mention (5)		33,926		-		-		10,944		11,392		56,262		-		56,262
Substandard (6)		92		-		-		75		1,635		1,802		-		1,802
Doubtful (7)		-		-		-		-		-		-		-		-
Total Commercial Real Estate	$	193,906	$	448,961	$	252,124	$	138,771	$	267,852	$	1,301,614	$	-	$	1,301,614
Gross charge-offs YTD	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Commercial & Industrial
Risk Rating
Pass (1-4)	$	45,543	$	54,615	$	26,541	$	21,958	$	3,952	$	152,609	$	93,655	$	246,264
Special Mention (5)		189		-		216		184		451		1,040		356		1,396
Substandard (6)		-		469		-		906		257		1,632		1,458		3,090
Doubtful (7)		-		-		-		-		-		-		-		-
Total Commercial & Industrial	$	45,732	$	55,084	$	26,757	$	23,048	$	4,660	$	155,281	$	95,469	$	250,750
Gross charge-offs YTD	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Other
Risk Rating
Pass (1-4)	$	2,810	$	-	$	17,360	$	6,017	$	4,902	$	31,089	$	-	$	31,089
Special Mention (5)		-		-		-		-		-		-		-		-
Substandard (6)		-		-		-		-		-		-		-		-
Doubtful (7)		-		-		-		-		-		-		-		-
Total Other	$	2,810	$	-	$	17,360	$	6,017	$	4,902	$	31,089	$	-	$	31,089
Gross charge-offs YTD	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

The following table presents payment performance as of September 30, 2023 by year of origination:


	(In Thousands)
	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans
											Term		Amortized		Grand
	2023		2022		2021		2020		Prior		Total		Cost Basis		Total

Consumer
Payment Performance
Performing	$	18,585	$	44,435	$	11,939	$	5,811	$	2,999	$	83,769	$	46	$	83,815
Nonperforming		-		-		-		7		-		7		-		7
Total Consumer	$	18,585	$	44,435	$	11,939	$	5,818	$	2,999	$	83,776	$	46	$	83,822
Gross charge-offs YTD	$	163	$	41	$	88	$	38	$	-	$	330	$	-	$	330

Collateral-dependent Loans

The following table presents collateral-dependent loans grouped by collateral as of September 30, 2023:


	(In Thousands)
	Real
	Estate
Consumer Real Estate	$	-
Agricultural Real Estate		-
Agricultural		311
Commercial Real Estate		-
Commercial & Industrial		1
Consumer		-
Total	$	312

Schedule of Impaired Loans

Information about impaired loans as of December 31, 2022 and September 30, 2022 are presented for comparison purposes and are as follows:


	(In Thousands)
	December 31, 2022		September 30, 2022

Impaired loans without a valuation allowance	$	4,194	$	5,835
Impaired loans with a valuation allowance		4,663		4,918
Total impaired loans	$	8,857	$	10,753
Valuation allowance related to impaired loans	$	1,996	$	2,436
Total non-accrual loans	$	4,689	$	5,470
Total loans past-due ninety days or more and still accruing	$	-	$	-
Quarter ended average investment in impaired loans	$	9,660	$	10,662
Year to date average investment in impaired loans	$	10,710	$	11,059

Loans Individually Evaluated for Impairment by Portfolio Class of Loans

The following tables present loans individually evaluated for impairment by class of loans for the three and nine months ended September 30, 2022 and for the year ended December 31, 2022.


	(In Thousands)
											QTD
							QTD		QTD		Interest
Three Months Ended September 30, 2022			Unpaid				Average		Interest		Income
	Recorded		Principal		Related		Recorded		Income		Recognized
	Investment		Balance		Allowance		Investment		Recognized		Cash Basis
With no related allowance recorded:
Consumer Real Estate	$	624	$	624	$	-	$	352	$	1	$	5
Agricultural Real Estate		2,588		2,693		-		2,467		6		1
Agricultural		1,334		1,334		-		1,309		-		-
Commercial Real Estate		1,251		1,251		-		1,505		9		14
Commercial and Industrial		21		21		-		63		-		-
Consumer		17		17		-		17		-		-
With a specific allowance recorded:
Consumer Real Estate		-		-		-		-		-		-
Agricultural Real Estate		-		-		-		-		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		2,936		2,936		500		2,960		39		-
Commercial and Industrial		1,982		1,982		1,936		1,989		72		-
Consumer		-		-		-		-		-		-
Totals:
Consumer Real Estate	$	624	$	624	$	-	$	352	$	1	$	5
Agricultural Real Estate	$	2,588	$	2,693	$	-	$	2,467	$	6	$	1
Agricultural	$	1,334	$	1,334	$	-	$	1,309	$	-	$	-
Commercial Real Estate	$	4,187	$	4,187	$	500	$	4,465	$	48	$	14
Commercial and Industrial	$	2,003	$	2,003	$	1,936	$	2,052	$	72	$	-
Consumer	$	17	$	17	$	-	$	17	$	-	$	-


	(In Thousands)
											YTD
							YTD		YTD		Interest
Nine Months Ended September 30, 2022			Unpaid				Average		Interest		Income
	Recorded		Principal		Related		Recorded		Income		Recognized
	Investment		Balance		Allowance		Investment		Recognized		Cash Basis
With no related allowance recorded:
Consumer Real Estate	$	624	$	624	$	-	$	372	$	3	$	10
Agricultural Real Estate		2,588		2,693		-		1,953		19		6
Agricultural		1,334		1,334		-		591		-		2
Commercial Real Estate		1,251		1,251		-		1,162		20		33
Commercial and Industrial		21		21		-		175		2		10
Consumer		17		17		-		18		1		-
With a specific allowance recorded:
Consumer Real Estate		-		-		-		-		-		-
Agricultural Real Estate		-		-		-		1,850		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		2,936		2,936		500		3,270		113		-
Commercial and Industrial		1,982		1,982		1,936		1,665		138		-
Consumer		-		-		-		3		-		-
Totals:
Consumer Real Estate	$	624	$	624	$	-	$	372	$	3	$	10
Agricultural Real Estate	$	2,588	$	2,693	$	-	$	3,803	$	19	$	6
Agricultural	$	1,334	$	1,334	$	-	$	591	$	-	$	2
Commercial Real Estate	$	4,187	$	4,187	$	500	$	4,432	$	133	$	33
Commercial and Industrial	$	2,003	$	2,003	$	1,936	$	1,840	$	140	$	10
Consumer	$	17	$	17	$	-	$	21	$	1	$	-


	(In Thousands)
											Interest
Year Ended December 31, 2022			Unpaid				Average		Interest		Income
	Recorded		Principal		Related		Recorded		Income		Recognized
	Investment		Balance		Allowance		Investment		Recognized		Cash Basis
With no related allowance recorded:
Consumer Real Estate	$	509	$	509	$	-	$	355	$	5	$	12
Agricultural Real Estate		2,280		2,385		-		2,048		25		6
Agricultural		152		152		-		588		-		2
Commercial Real Estate		1,234		1,272		-		1,252		29		43
Commercial and Industrial		17		417		-		135		2		10
Consumer		2		2		-		15		1		-
With a specific allowance recorded:
Consumer Real Estate		60		60		6		15		-		1
Agricultural Real Estate		-		-		-		1,388		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		2,874		2,874		438		3,176		150		-
Commercial and Industrial		1,564		1,564		1,551		1,736		149		23
Consumer		165		165		1		2		-		-
Totals:
Consumer Real Estate	$	569	$	569	$	6	$	370	$	5	$	13
Agricultural Real Estate	$	2,280	$	2,385	$	-	$	3,436	$	25	$	6
Agricultural	$	152	$	152	$	-	$	588	$	-	$	2
Commercial Real Estate	$	4,108	$	4,146	$	438	$	4,428	$	179	$	43
Commercial and Industrial	$	1,581	$	1,981	$	1,551	$	1,871	$	151	$	33
Consumer	$	167	$	167	$	1	$	17	$	1	$	-

Analysis of Allowance for Credit Losses


	(In Thousands)
	Consumer Real Estate			Agricultural Real Estate		Agricultural		Commercial Real Estate		Commercial and Industrial			Consumer			Total
Three Months Ended September 30, 2023
ALLOWANCE FOR CREDIT LOSSES
Beginning balance	$	3,998		$	237	$	107	$	16,681	$	2,767		$	1,120		$	24,910
Provision for credit losses - loans		(170	)		77		78		123		(65	)		417			460
Charge-offs		-			-		-		-		-			(148	)		(148	)
Recoveries		14			1		-		1		6			33			55
Ending Balance	$	3,842		$	315	$	185	$	16,805	$	2,708		$	1,422		$	25,277


	(In Thousands)
	Consumer Real Estate				Agricultural Real Estate			Agricultural			Commercial Real Estate		Commercial and Industrial			Consumer			Total
Nine Months Ended September 30, 2023
ALLOWANCE FOR CREDIT LOSSES
Beginning balance	$	998			$	349		$	751		$	11,924	$	5,382		$	909		$	20,313
Adoption of ASU 2016-13		2,874		-		(166	)		(650	)		3,501		(2,165	)		170			3,564
Provision for credit losses-loans		(57	)			27			84			1,374		(527	)		519			1,420
Charge-offs		-				-			-			-		-			(330	)		(330	)
Recoveries		27				105			-			6		18			154			310
Ending Balance	$	3,842			$	315		$	185		$	16,805	$	2,708		$	1,422		$	25,277

The following tables break down the activity in the AULC for the three and nine months ended September 30, 2023:


	(In Thousands)
	Unfunded Loan Commitment & Letters of Credit
Three Months Ended September 30, 2023
ALLOWANCE FOR UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT
Beginning balance	$	2,099
Provision for credit losses - off balance sheet credit exposures		(76	)
Charge-offs		-
Recoveries		-
Ending Balance	$	2,023


	(In Thousands)
	Unfunded Loan Commitment & Letters of Credit
Nine Months Ended September 30, 2023
ALLOWANCE FOR UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT
Beginning balance	$	1,262
Adoption of ASU 2016-13		904
Provision for credit losses-off balance sheet credit exposures		(143	)
Charge-offs		-
Recoveries		-
Ending Balance	$	2,023

Additional analysis, presented in thousands, related to the ALLL for the three and nine months ended September 30, 2022 in addition to the ending balances, presented in thousands, as of December 31, 2022 is as follows:


	Consumer Real Estate			Agricultural Real Estate		Agricultural		Commercial Real Estate		Commercial and Industrial		Consumer			Unfunded Loan Commitment & Letters of Credit			Unallocated			Total
Three Months Ended September 30, 2022
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	939		$	346	$	754	$	10,427	$	5,365	$	567		$	1,167		$	26		$	19,591
Charge Offs		-			-		-		-		-		(123	)		-			-			(123	)
Recoveries		6			-		1		2		8		35			-			-			52
Provision (Credit)		(19	)		10		1		1,122		297		246			-			(20	)		1,637
Other Non-interest expense related to unfunded		-			-		-		-		-		-			(49	)		-			(49	)
Ending Balance	$	926		$	356	$	756	$	11,551	$	5,670	$	725		$	1,118		$	6		$	21,108
Ending balance: individually evaluated for impairment	$	-		$	-	$	-	$	500	$	1,936	$	-		$	-		$	-		$	2,436
Ending balance: collectively evaluated for impairment	$	926		$	356	$	756	$	11,051	$	3,734	$	725		$	1,118		$	6		$	18,672
Ending balance: loans acquired with deteriorated credit quality	$	-		$	-	$	-	$	-	$	-	$	-		$	-		$	-		$	-
FINANCING RECEIVABLES:
Ending balance	$	416,044		$	204,787	$	128,818	$	1,061,904	$	260,000	$	71,063		$	-		$	-		$	2,142,616
Ending balance: individually evaluated for impairment	$	624		$	2,588	$	1,334	$	4,187	$	2,003	$	17		$	-		$	-		$	10,753
Ending balance: collectively evaluated for impairment	$	414,951		$	202,003	$	127,484	$	1,057,699	$	257,948	$	71,046		$	-		$	-		$	2,131,131
Ending balance: loans acquired with deteriorated credit quality	$	469		$	196	$	-	$	18	$	49	$	-		$	-		$	-		$	732


	Consumer Real Estate		Agricultural Real Estate			Agricultural		Commercial Real Estate		Commercial and Industrial			Consumer			Unfunded Loan Commitment & Letters of Credit		Unallocated			Total
Nine Months Ended September 30, 2022
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	857	$	1,040		$	709	$	9,130	$	3,847		$	625		$	1,041	$	34		$	17,283
Charge Offs		-		-			-		-		(6	)		(328	)		-		-			(334	)
Recoveries		15		-			1		7		82			132			-		-			237
Provision (Credit)		54		(684	)		46		2,414		1,747			296			-		(28	)		3,845
Other Non-interest expense related to unfunded		-		-			-		-		-			-			77		-			77
Ending Balance	$	926	$	356		$	756	$	11,551	$	5,670		$	725		$	1,118	$	6		$	21,108
Ending balance: individually evaluated for impairment	$	-	$	-		$	-	$	500	$	1,936		$	-		$	-	$	-		$	2,436
Ending balance: collectively evaluated for impairment	$	926	$	356		$	756	$	11,051	$	3,734		$	725		$	1,118	$	6		$	18,672
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-		$	-	$	-	$	-		$	-		$	-	$	-		$	-
FINANCING RECEIVABLES:
Ending balance	$	416,044	$	204,787		$	128,818	$	1,061,904	$	260,000		$	71,063		$	-	$	-		$	2,142,616
Ending balance: individually evaluated for impairment	$	624	$	2,588		$	1,334	$	4,187	$	2,003		$	17		$	-	$	-		$	10,753
Ending balance: collectively evaluated for impairment	$	414,951	$	202,003		$	127,484	$	1,057,699	$	257,948		$	71,046		$	-	$	-		$	2,131,131
Ending balance: loans acquired with deteriorated credit quality	$	469	$	196		$	-	$	18	$	49		$	-		$	-	$	-		$	732


December 31, 2022	Consumer Real Estate		Agricultural Real Estate			Agricultural		Commercial Real Estate		Commercial and Industrial			Consumer			Unfunded Loan Commitment & Letters of Credit		Unallocated			Total
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	857	$	1,040		$	709	$	9,130	$	3,847		$	625		$	1,041	$	34		$	17,283
Charge Offs		-		-			-		-		(418	)		(409	)		-		-			(827	)
Recoveries		20		-			7		9		93			169			-		-			298
Provision (Credit)		121		(691	)		35		2,785		1,860			506			-		(16	)		4,600
Other Non-interest expense related to unfunded		-		-			-		-		-			-			221		-			221
Ending Balance	$	998	$	349		$	751	$	11,924	$	5,382		$	891		$	1,262	$	18		$	21,575
Ending balance: individually evaluated for impairment	$	6	$	-		$	-	$	438	$	1,551		$	1		$	-	$	-		$	1,996
Ending balance: collectively evaluated for impairment	$	992	$	349		$	751	$	11,486	$	3,831		$	890		$	1,262	$	18		$	19,579
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-		$	-	$	-	$	-		$	-		$	-	$	-		$	-
FINANCING RECEIVABLES:
Ending balance	$	494,423	$	220,514		$	128,926	$	1,150,511	$	272,119		$	89,894		$	-	$	-		$	2,356,387
Ending balance: individually evaluated for impairment	$	569	$	2,280		$	152	$	4,108	$	1,581		$	167		$	-	$	-		$	8,857
Ending balance: collectively evaluated for impairment	$	493,449	$	218,039		$	128,774	$	1,146,389	$	270,493		$	89,727		$	-	$	-		$	2,346,871
Ending balance: loans acquired with deteriorated credit quality	$	405	$	195		$	-	$	14	$	45		$	-		$	-	$	-		$	659