Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2023

Text Block [Abstract]

Changes in the Allowance for Loan Losses

The following tables present, by portfolio segment, the changes in the ACL for the three- and six-months ended June 30, 2023 and 2022.

Allowance for credit losses:

For the three months ended June 30, 2023	Beginning balance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	3,316	$	—		$	42	$	2,182		$	5,540
Commercial Real Estate:				—			—
Owner Occupied		5,733		—			—		(202	)		5,531
Non-Owner Occupied		11,760		—			8		(122	)		11,646
Residential Real Estate		5,934		(1	)		32		550			6,515
Real Estate Construction		3,920		—			5		(478	)		3,447
Farm Real Estate		269		—			—		(26	)		243
Lease Financing Receivables		2,907		—			—		(960	)		1,947
Consumer and Other		354		(13	)		19		(88	)		272
Unallocated		3		—			—		5			8
Total	$	34,196	$	(14	)	$	106	$	861		$	35,149
1 Day 1 impact of $1,668, of adopting ASC 326-PCD loans was netted by changes in estimates of $771.

Allowance for credit losses:

For the three months ended June 30, 2022	Beginning balance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	2,584	$	—		$	3	$	203		$	2,790
Commercial Real Estate:
Owner Occupied		4,594		—			27		108			4,729
Non-Owner Occupied		14,577		—			4		130			14,711
Residential Real Estate		2,612		(57	)		15		289			2,859
Real Estate Construction		1,863		—			—		106			1,969
Farm Real Estate		249		—			2		(15	)		236
Consumer and Other		136		(3	)		11		(14	)		130
Unallocated		418		—			—		(407	)		11
Total	$	27,033	$	(60	)	$	62	$	400		$	27,435

December 31, 2022	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for credit 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
Consumer and Other		—		—		98		98
Lease Financing Receivables		—		—		429		429
Unallocated		—		—		541		541
Total	$	9	$	7	$	28,495	$	28,511
Outstanding loan balances:
Commercial & Agriculture	$	863.00	$	—	$	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

Credit Exposures by Internally Assigned Grades

Based on the most recent analysis performed, the risk category of loans, by type and year of originations, at June 30, 2023, is as follows:

	Term Loans Amortized Cost Basis by Origination Year
															Revolving
															Loans
													Revolving		Converted
June 30, 2023	2023		2022		2021		2020		2019		Prior		Loans		to Term		Total
Commercial & Agriculture
Pass	$	67,864	$	68,956	$	31,829	$	9,035	$	9,228	$	2,482	$	96,802	$	—	$	286,196
Special Mention		—		—		—		113		—		—		159		—		272
Substandard		—		—		2,627		130		—		101		2,410		—		5,268
Doubtful		—		207		124		24		—		—		—		—		355
Total Commercial & Agriculture	$	67,864	$	69,163	$	34,580	$	9,302	$	9,228	$	2,583	$	99,371	$	—	$	292,091
Commercial & Agriculture:
Current-period gross charge-offs	$	—	$	59	$	—	$	—	$	—	$	81	$	—	$	—	$	140
Commercial Real Estate - Owner Occupied
Pass	$	15,978	$	83,687	$	74,403	$	62,948	$	33,994	$	88,206	$	6,829	$	—	$	366,045
Special Mention		—		—		—		—		400		311		—		—		711
Substandard		—		—		1		—		—		1,038		2		—		1,041
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Real Estate - Owner Occupied	$	15,978	$	83,687	$	74,404	$	62,948	$	34,394	$	89,555	$	6,831	$	—	$	367,797
Commercial Real Estate - Owner Occupied:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial Real Estate - Non-Owner Occupied
Pass	$	84,210	$	284,184	$	219,651	$	148,969	$	114,306	$	169,197	$	25,786	$	—	$	1,046,302
Special Mention		—		5,543		—		—		277		7,250		277		—		13,347
Substandard		—		—		—		—		146		3,468		—		—		3,614
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Real Estate - Non-Owner Occupied	$	84,210	$	289,727	$	219,651	$	148,969	$	114,730	$	179,914	$	26,063	$	—	$	1,063,263
Commercial Real Estate - Non-Owner Occupied:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential Real Estate
Pass	$	46,011	$	108,692	$	100,130	$	77,777	$	37,552	$	85,246	$	127,539	$	—	$	582,948
Special Mention		—		54		—		—		—		45		55		—		155
Substandard		—		240		361		258		978		3,505		621		—		5,963
Doubtful		—		—		—		—		—		—		—		—		—
Total Residential Real Estate	$	46,011	$	108,987	$	100,492	$	78,036	$	38,530	$	88,796	$	128,215	$	—	$	589,066
Residential Real Estate:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	11	$	—	$	—	$	11

Real Estate Construction
Pass	$	39,396	$	129,587	$	37,997	$	18,211	$	—	$	—	$	8,900	$	—	$	234,092
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		-		—		169		—		—		—		169
Doubtful		—		—		—		—		—		—		—		—		—
Total Real Estate Construction	$	39,396	$	129,587	$	37,997	$	18,211	$	169	$	—	$	8,900	$	—	$	234,261
Real Estate Construction:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Farm Real Estate
Pass	$	792	$	1,369	$	2,400	$	5,321	$	826	$	12,188	$	1,040	$	—	$	23,935
Special Mention		—		—		—		—		—		187		—		—		187
Substandard		—		—		—		-		—		—		—		—		-
Doubtful		—		—		—		—		—		—		—		—		—
Total Farm Real Estate	$	792	$	1,369	$	2,400	$	5,321	$	826	$	12,375	$	1,040	$	—	$	24,123
Farm Real Estate:
Current-period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Lease Financing Receivables
Pass	$	19,340	$	18,316	$	5,291	$	2,099	$	1,272	$	46	$	—	$	—	$	46,364
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		-		—		—		—		—		—		-
Doubtful		—		—		33		—		156		—		—		—		189
Total Lease Financing Receivables	$	19,340	$	18,316	$	5,324	$	2,099	$	1,428	$	46	$	—	$	—	$	46,553
Lease Financing Receivables:
Current-period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer and Other
Pass	$	3,962	$	5,360	$	4,753	$	2,148	$	797	$	416	$	1,634	$	—	$	19,070
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		14		33		1		—		8		—		—		57
Doubtful		—		—		—		—		—		—		—		—		—
Total Consumer and Other	$	3,962	$	5,374	$	4,786	$	2,149	$	797	$	424	$	1,634	$	—	$	19,126
Consumer and Other:
Current-period charge-offs	$	—	$	9	$	12	$	3	$	10	$	—	$	4	$	—	$	38
Total Loans	$	277,553	$	706,209	$	479,633	$	327,035	$	200,102	$	373,694	$	272,054	$	—	$	2,636,280
Total Loans:
Current-period charge-offs	$	—	$	68	$	12	$	3	$	10	$	92	$	4	$	—	$	189

Generally, Residential Real Estate, Real Estate Construction and Consumer and Other loans are not risk-graded, except when collateral is used for a business purpose. Only those loans that have been risk rated as of December 31, 2022 are included below.

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

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

Aging Analysis of Past Due Loans

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of June 30, 2023 and December 31, 2022.

June 30, 2023	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	2,146	$	315	$	1,072	$	3,533	$	288,558	$	292,091	$	—
Commercial Real Estate:
Owner Occupied		—		18		219		237		367,560		367,797		—
Non-Owner Occupied		—		—		1,252		1,252		1,062,011		1,063,263		—
Residential Real Estate		389		678		1,786		2,853		586,213		589,066		—
Real Estate Construction		—		—		—		—		234,261		234,261		—
Farm Real Estate		—		—		—		—		24,123		24,123		—
Lease Financing Receivables		334		436		202		972		45,581		46,553		—
Consumer and Other		83		12		55		150		18,976		19,126		—
Total	$	2,952	$	1,459	$	4,586	$	8,997	$	2,627,283	$	2,636,280	$	—

December 31, 2022	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		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	$	—

Summary of Nonaccrual Loans Excluding PCI Loans

The following table presents loans on nonaccrual status as of June 30, 2023.

June 30, 2023
	Nonaccrual loans with a related ACL		Nonaccrual loans without a related ACL		Total Nonaccrual loans		Interest Income Recognized
Commercial & Agriculture	$	565	$	622	$	1,187	$	—
Commercial Real Estate:
Owner Occupied		—		312		312		9
Non-Owner Occupied		—		1,252		1,252		—
Residential Real Estate		—		4,571		4,571		65
Real Estate Construction		—		214		214		—
Farm Real Estate		—		—		—		—
Lease Financing Receivables		373		—		373		—
Consumer and Other		—		63		63		3
Total	$	938	$	7,034	$	7,972	$	77

The following table presents loans on nonaccrual status as of December 31, 2022, excluding PCI loans.

	December 31, 2022
Commercial & Agriculture	$	774
Commercial Real Estate:
Owner Occupied		386
Non-Owner Occupied		1,109
Residential Real Estate		3,926
Real Estate Construction		221
Farm Real Estate		—
Lease Financing Receivables		—
Consumer and Other		91
Total	$	6,507

Schedule of Amortized Cost Basis of Collateral Dependent Loans Individually Evaluated Expected Credit Losses and Related Allowance for Credit Losses

The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans.

June 30, 2023	Real Estate		Other		Allowance for Credit Losses
Commercial & Agriculture	$	49	$	632	$	307
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		610		—		—
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Lease Financing Receivables		—		431		216
Consumer and Other		—		—		—
Total	$	659	$	1,063	$	523

Impaired Loans Excluding PCI Loans

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

	December 31, 2022
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial & Agriculture	$	—	$	—			$	86	$	—
Commercial Real Estate:
Owner Occupied		82		82				192		6
Non-Owner Occupied		—		—				35		—
Residential Real Estate		385		410				595		40
Farm Real Estate		—		—				381		14
Total		467		492				1,289		60
With an allowance recorded:
Commercial & Agriculture		—		—	$	—		—		—
Commercial Real Estate:
Owner Occupied		150		150		6		214		—
Residential Real Estate		7		11		1		19		—
Lease Financing Receivables		—		—		—		—		—
Consumer and Other		—		—		—		—		—
Total		157		161		7		233		—
Total:
Commercial & Agriculture		—		—		—		86		—
Commercial Real Estate:
Owner Occupied		232		232		6		406		6
Non-Owner Occupied		—		—		—		35		—
Residential Real Estate		392		421		1		614		40
Lease Financing Receivables		—		—		—		381		14
Consumer and Other		—		—		—		—		—
Total	$	624	$	653	$	7	$	1,522	$	60

The following table includes the average recorded investment and interest income recognized for impaired financing receivables for the three and six-month periods ended June 30, 2022.

	June 30, 2022
For the three months ended	Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	—	$	—
Commercial Real Estate—Owner Occupied		178		3
Commercial Real Estate—Non-Owner Occupied		—		—
Residential Real Estate		466		6
Real Estate Construction		—		—
Farm Real Estate		501		6
Lease Financing Receivables		—		—
Consumer and Other		—		—
Total	$	1,145	$	15

	June 30, 2022
For the six months ended	Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	—	$	—
Commercial Real Estate—Owner Occupied		187		6
Commercial Real Estate—Non-Owner Occupied		—		—
Residential Real Estate		492		13
Real Estate Construction		—		—
Farm Real Estate		508		12
Lease Financing Receivables		—		—
Consumer and Other		—		—
Total	$	1,187	$	31

Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Accretable Yield Accretion Table Text Block

Changes in the accretable yield for PCI loans as of June 30, 2022 were as follows, since acquisition:

	For the Three-Month Period Ended June 30, 2022
	(In Thousands)
Balance at beginning of period	$	217
Acquisition of PCI loans		—
Accretion		(16	)
Transfer from non-accretable to accretable		15
Balance at end of period	$	216

Schedule of Loans Acquired and Accounted

The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30 as of December 31, 2022:

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

Schedule Of Allowance For Credit Losses On Off-balance Sheet Credit Exposures

The following table lists the allowance for credit losses on off-balance sheet credit exposures as of June 30, 2023:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Beginning of Period	$	3,588		—	—			—
CECL adoption adjustments		—		—		3,386		—
Charge-offs		—		—		—		—
Recoveries		—		—		—		—
Provision		263		—		465		—
End of Period	$	3,851	—		$	3,851		—