Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2022

Changes in the Allowance for Loan Losses and Loan Balances Outstanding

The following tables present, by portfolio segment, the changes in the allowance for loan losses, the ending allocation of the allowance for loan losses and the loan balances outstanding for the years ended December 31, 2022, 2021 and 2020. The changes can be impacted by overall loan volume, adversely graded loans, historical charge-offs and economic factors.

Allowance for loan losses:

December 31, 2022	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	2,600	$	(22	)	$	24	$	409		$	3,011
Commercial Real Estate:
Owner Occupied		4,464		—			42		59			4,565
Non-Owner Occupied		13,860		—			74		204			14,138
Residential Real Estate		2,597		(97	)		163		482			3,145
Real Estate Construction		1,810		—			4		479			2,293
Farm Real Estate		287		—			6		(2	)		291
Lease financing receivable		—		(23	)		—		452			429
Consumer and Other		176		(80	)		27		(25	)		98
Unallocated		847		—			—		(306	)		541
Total	$	26,641	$	(222	)	$	340	$	1,752		$	28,511

Allowance for loan losses:

December 31, 2021	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	2,810	$	(15	)	$	165	$	(360	)	$	2,600
Commercial Real Estate:
Owner Occupied		4,057		—			7		400			4,464
Non-Owner Occupied		12,451		—			395		1,014			13,860
Residential Real Estate		2,484		(120	)		302		(69	)		2,597
Real Estate Construction		2,439		—			1		(630	)		1,810
Farm Real Estate		338		—			12		(63	)		287
Consumer and Other		209		(24	)		60		(69	)		176
Unallocated		240		—			—		607			847
Total	$	25,028	$	(159	)	$	942	$	830		$	26,641

Allowance for loan losses:

December 31, 2020	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	2,219	$	(20	)	$	7	$	604		$	2,810
Commercial Real Estate:
Owner Occupied		2,541		(148	)		259		1,405			4,057
Non-Owner Occupied		6,584		—			48		5,819			12,451
Residential Real Estate		1,582		(236	)		218		920			2,484
Real Estate Construction		1,250		—			4		1,185			2,439
Farm Real Estate		344		—			13		(19	)		338
Consumer and Other		247		(61	)		65		(42	)		209
Unallocated		—		—			—		240			240
Total	$	14,767	$	(465	)	$	614	$	10,112		$	25,028

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of December 31, 2022 and December 31, 2021.

December 31, 2022	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	6	$	—	$	3,005	$	3,011
Commercial Real Estate:
Owner Occupied		3		6		4,556		4,565
Non-Owner Occupied		—		—		14,138		14,138
Residential Real Estate		—		1		3,144		3,145
Real Estate Construction		—		—		2,293		2,293
Farm Real Estate		—		—		291		291
Lease financing receivables		—		—		429		429
Consumer and Other		—		—		98		98
Unallocated		—		—		541		541
Total	$	9	$	7	$	28,495	$	28,511
Outstanding loan balances:
Commercial & Agriculture	$	863	$	—	$	277,732	$	278,595
Commercial Real Estate:
Owner Occupied		1,988		232		368,927		371,147
Non-Owner Occupied		119		—		1,018,617		1,018,736
Residential Real Estate		1,414		392		550,975		552,781
Real Estate Construction		—		—		243,127		243,127
Farm Real Estate		—		—		24,708		24,708
Lease financing receivables		—		—		36,797		36,797
Consumer and Other		1		—		20,774		20,775
Total	$	4,385	$	624	$	2,541,657	$	2,546,666

NOTE 5 - ALLOWANCE FOR LOAN LOSSES (Continued)

December 31, 2021	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	—	$	—	$	2,600	$	2,600
Commercial Real Estate:
Owner Occupied		—		7		4,457		4,464
Non-Owner Occupied		—		—		13,860		13,860
Residential Real Estate		—		11		2,586		2,597
Real Estate Construction		—		—		1,810		1,810
Farm Real Estate		—		—		287		287
Consumer and Other		—		—		176		176
Unallocated		—		—		847		847
Total	$	—	$	18	$	26,623	$	26,641
Outstanding loan balances:
Commercial & Agriculture	$	—	$	—	$	246,502	$	246,502
Commercial Real Estate:
Owner Occupied		—		187		295,265		295,452
Non-Owner Occupied		—		—		829,310		829,310
Residential Real Estate		290		526		429,244		430,060
Real Estate Construction		—		—		157,127		157,127
Farm Real Estate		—		509		27,910		28,419
Consumer and Other		—		—		11,009		11,009
Total	$	290	$	1,222	$	1,996,367	$	1,997,879

Credit Exposures by Internally Assigned Grades

December 31, 2022	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	273,291	$	2,558	$	2,746	$	—	$	278,595
Commercial Real Estate:
Owner Occupied		367,652		734		2,761		—		371,147
Non-Owner Occupied		1,003,942		10,947		3,847		—		1,018,736
Residential Real Estate		114,021		183		5,787		—		119,991
Real Estate Construction		198,734		—		221		—		198,955
Farm Real Estate		24,283		379		46		—		24,708
Lease financing receivables		36,223		—		401		173		36,797
Consumer and Other		839		—		163		—		1,002
Total	$	2,018,985	$	14,801	$	15,972	$	173	$	2,049,931

December 31, 2021	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	244,787	$	526	$	1,189	$	—	$	246,502
Commercial Real Estate:
Owner Occupied		290,617		3,119		1,716		—		295,452
Non-Owner Occupied		764,181		28,042		37,087		—		829,310
Residential Real Estate		77,594		164		4,455		—		82,213
Real Estate Construction		136,149		260		5		—		136,414
Farm Real Estate		27,023		205		1,191		—		28,419
Consumer and Other		764		—		20		—		784
Total	$	1,541,115	$	32,316	$	45,663	$	—	$	1,619,094

Performing and Nonperforming Loans

December 31, 2022	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	432,790	$	44,172	$	19,773	$	496,735
Nonperforming		—		—		—		—
Total	$	432,790	$	44,172	$	19,773	$	496,735

December 31, 2021	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	347,847	$	20,713	$	10,225	$	378,785
Nonperforming		—		—		—		—
Total	$	347,847	$	20,713	$	10,225	$	378,785

Aging Analysis of Past Due Loans

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of December 31, 2022 and 2021.

December 31, 2022	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	247	$	78	$	534	$	859	$	276,873	$	863	$	278,595	$	—
Commercial Real Estate:
Owner Occupied		21		13		76		110		369,049		1,988		371,147		—
Non-Owner Occupied		—		—		1,164		1,164		1,017,453		119		1,018,736		—
Residential Real Estate		3,133		857		1,107		5,097		546,270		1,414		552,781		—
Real Estate Construction		—		—		219		219		242,908		—		243,127		—
Farm Real Estate		7		—		—		7		24,701		—		24,708		—
Lease financing receivables		1,040		—		341		1,381		35,416		—		36,797
Consumer and Other		293		49		74		416		20,358		1		20,775		—
Total	$	4,741	$	997	$	3,515	$	9,253	$	2,533,028	$	4,385	$	2,546,666	$	—

December 31, 2021	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	249	$	13	$	78	$	340	$	246,162	$	—	$	246,502	$	—
Commercial Real Estate:
Owner Occupied		—		—		106		106		295,346		—		295,452		—
Non-Owner Occupied		—		—		4		4		829,306		—		829,310		—
Residential Real Estate		1,848		879		842		3,569		426,201		290		430,060		—
Real Estate Construction		—		—		—		—		157,127		—		157,127		—
Farm Real Estate		—		—		—		—		28,419		—		28,419		—
Consumer and Other		42		—		9		51		10,958		—		11,009		—
Total	$	2,139	$	892	$	1,039	$	4,070	$	1,993,519	$	290	$	1,997,879	$	—

Summary of Nonaccrual Loans Excluding Purchased Credit-Impaired (PCI) Loans

The following table presents loans on nonaccrual status, excluding purchased credit-impaired (PCI) loans, as of December 31, 2022 and 2021.

	2022		2021
Commercial & Agriculture	$	774	$	78
Commercial Real Estate:
Owner Occupied		386		334
Non-Owner Occupied		1,109		4
Residential Real Estate		3,926		3,232
Real Estate Construction		221		5
Farm Real Estate		—		—
Lease financing receivables		—		—
Consumer and Other		91		20
Total	$	6,507	$	3,673

Impaired Financing Receivables Excluding PCI Loans

The following table includes the recorded investment and unpaid principal balances for impaired financing receivables, excluding PCI loans, with the associated allowance amount, if applicable, as of December 31, 2022 and 2021.

	December 31, 2022						December 31, 2021
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial Real Estate:
Owner Occupied	$	82	$	82			$	—	$	—
Non-Owner Occupied		—		—				—		—
Residential Real Estate		385		410				503		528
Farm Real Estate		—		—				509		509
Total		467		492				1,012		1,037
With an allowance recorded:
Commercial Real Estate:
Owner Occupied		150		150	$	6		187		187	$	7
Residential Real Estate		7		11		1		23		27		11
Total		157		161		7		210		214		18
Total:
Commercial & Agriculture		—		—		—		—		—		—
Commercial Real Estate:
Owner Occupied		232		232		6		187		187		7
Non-Owner Occupied		—		—		—		—		—		—
Residential Real Estate		392		421		1		526		555		11
Farm Real Estate		—		—		—		509		509		—
Total	$	624	$	653	$	7	$	1,222	$	1,251	$	18

The following tables include the average recorded investment and interest income recognized for impaired financing receivables as of, and for the years ended, December 31, 2022, 2021 and 2020.

For the year ended:	December 31, 2022				December 31, 2021
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	86	$	3	$	15	$	—
Commercial Real Estate:
Owner Occupied		406		22		396		18
Non-Owner Occupied		35		1		23		1
Residential Real Estate		614		33		629		31
Farm Real Estate		381		14		569		24
Total	$	1,522	$	73	$	1,632	$	74

For the year ended:	December 31, 2020
	Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	88	$	4
Commercial Real Estate:
Owner Occupied		520		27
Non-Owner Occupied		243		16
Residential Real Estate		1,361		43
Farm Real Estate		647		26
Total	$	2,859	$	116

Schedule of Changes in Amortized Yield for PCI Loans

Changes in the amortizable yield for PCI loans were as follows, since acquisition:

	At December 31, 2022			At December 31, 2021
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	217		$	225
Acquisition of PCI loans		—			—
Accretion		(36	)		(77	)
Transfers from non-accretable to accretable		33			69
Balance at end of period	$	214		$	217

Schedule of Loans Acquired and Accounted

The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30:

	At December 31, 2022		At December 31, 2021
	Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)		Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)
	(In Thousands)
Outstanding balance	$	5,220	$	512
Carrying amount		4,386		290