Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2023

Text Block [Abstract]

Changes in the Allowance for Loan Losses

The following table presents, by portfolio segment, the changes in the ACL for the three- and nine-months ended September 30, 2023 and 2022.

Allowance for credit losses:

For the three months ended September 30, 2023	Beginning balance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	5,540	$	(614	)	$	84	$	146		$	5,156
Commercial Real Estate:
Owner Occupied		5,531		—			—		(50	)		5,481
Non-Owner Occupied		11,646		—			9		(100	)		11,555
Residential Real Estate		6,515		(1	)		64		253			6,831
Real Estate Construction		3,447		—			4		288			3,739
Farm Real Estate		243		—			—		(16	)		227
Lease Financing Receivables		1,947		—			—		(115	)		1,832
Consumer and Other		272		(51	)		6		21			248
Unallocated		8		—			—		203			211
Total	$	35,149	$	(666	)	$	167	$	630		$	35,280

Allowance for credit losses:

For the three months ended September 30, 2022	Beginning balance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	2,790	$	(22	)	$	12	$	(51	)	$	2,729
Commercial Real Estate:
Owner Occupied		4,729		—			15		182			4,926
Non-Owner Occupied		14,711		—			16		(300	)		14,427
Residential Real Estate		2,859		(39	)		64		152			3,036
Real Estate Construction		1,969		—			—		44			2,013
Farm Real Estate		236		—			1		14			251
Consumer and Other		130		(13	)		4		21			142
Unallocated		11		—			—		238			249
Total	$	27,435	$	(74	)	$	112	$	300		$	27,773

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 September 30, 2023, is as follows:

	Term Loans Amortized Cost Basis by Origination Year
															Revolving
															Loans
													Revolving		Converted
September 30, 2023	2023		2022		2021		2020		2019		Prior		Loans		to Term		Total
Commercial & Agriculture
Pass	$	60,223	$	72,407	$	46,378	$	12,263	$	7,418	$	15,439	$	79,760	$	—	$	293,888
Special Mention		906		—		340		1,797		—		113		176		—		3,332
Substandard		408		—		62		117		283		195		3,592		—		4,657
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial & Agriculture	$	61,537	$	72,407	$	46,780	$	14,177	$	7,701	$	15,747	$	83,528	$	—	$	301,877
Commercial & Agriculture:
Current-period gross charge-offs	$	—	$	673	$	—	$	—	$	—	$	81	$	—	$	—	$	754
Commercial Real Estate - Owner Occupied
Pass	$	28,733	$	81,961	$	67,764	$	57,827	$	30,558	$	96,394	$	6,488	$	—	$	369,725
Special Mention		529		219		745		294		3,098		287		—		—		5,172
Substandard		—		—		—		—		—		954		—		—		954
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Real Estate - Owner Occupied	$	29,262	$	82,180	$	68,509	$	58,121	$	33,656	$	97,635	$	6,488	$	—	$	375,851
Commercial Real Estate - Owner Occupied:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial Real Estate - Non-Owner Occupied
Pass	$	118,399	$	261,880	$	195,881	$	138,388	$	121,917	$	219,770	$	23,446	$	—	$	1,079,681
Special Mention		—		5,816		6,227		—		-		7,373		277		—		19,693
Substandard		—		—		—		—		129		3,429		—		—		3,558
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Real Estate - Non-Owner Occupied	$	118,399	$	267,696	$	202,108	$	138,388	$	122,046	$	230,572	$	23,723	$	—	$	1,102,932
Commercial Real Estate - Non-Owner Occupied:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential Real Estate
Pass	$	62,756	$	106,652	$	95,914	$	73,032	$	35,184	$	80,593	$	153,753	$	—	$	607,884
Special Mention		—		-		224		98		—		250		55		—		627
Substandard		—		352		442		85		583		3,049		1,282		—		5,793
Doubtful		—		—		—		—		—		—		—		—		—
Total Residential Real Estate	$	62,756	$	107,004	$	96,580	$	73,215	$	35,767	$	83,892	$	155,090	$	—	$	614,304
Residential Real Estate:

Current-period gross charge-offs $ — $ — $ — $ — $ — $ 12 $ — $ — $ 12

Real Estate Construction
Pass	$	62,658	$	137,265	$	31,871	$	15,563	$	2,678	$	2,708	$	12,271	$	—	$	265,014
Special Mention		—		1,129		926		2,019		—		—		—		—		4,074
Substandard		—		—		42		—		161		—		—		—		203
Doubtful		—		—		—		—		—		—		—		—		—
Total Real Estate Construction	$	62,658	$	138,394	$	32,839	$	17,582	$	2,839	$	2,708	$	12,271	$	—	$	269,291
Real Estate Construction:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Farm Real Estate
Pass	$	816	$	987	$	2,309	$	4,552	$	806	$	13,295	$	1,161	$	—	$	23,926
Special Mention		—		—		—		—		—		183		—		—		183
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Farm Real Estate	$	816	$	987	$	2,309	$	4,552	$	806	$	13,478	$	1,161	$	—	$	24,109
Farm Real Estate:
Current-period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Lease Financing Receivables
Pass	$	21,794	$	14,071	$	6,605	$	3,754	$	1,964	$	18	$	—	$	—	$	48,206
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		53		—		—		—		—		—		53
Total Lease Financing Receivables	$	21,794	$	14,071	$	6,658	$	3,754	$	1,964	$	18	$	—	$	—	$	48,259
Lease Financing Receivables:
Current-period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer and Other
Pass	$	5,014	$	4,741	$	4,103	$	1,875	$	639	$	322	$	1,536	$	—	$	18,230
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		14		17		—		6		—		—		37
Doubtful		—		—		—		—		—		—		—		—		—
Total Consumer and Other	$	5,014	$	4,741	$	4,117	$	1,892	$	639	$	328	$	1,536	$	—	$	18,267
Consumer and Other:
Current-period charge-offs	$	1	$	27	$	40	$	6	$	10	$	—	$	5	$	—	$	89
Total Loans	$	362,236	$	687,480	$	459,900	$	311,681	$	205,418	$	444,378	$	283,797	$	—	$	2,754,890
Total Loans:
Current-period charge-offs	$	1	$	700	$	40	$	6	$	10	$	93	$	5	$	—	$	855

Prior to the adoption of CECL, 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 September 30, 2023 and December 31, 2022.

September 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	$	834	$	1,284	$	1,469	$	3,587	$	298,290	$	301,877	$	—
Commercial Real Estate:
Owner Occupied		87		—		34		121		375,730		375,851		—
Non-Owner Occupied		—		—		—		—		1,102,932		1,102,932		—
Residential Real Estate		731		791		1,812		3,334		610,970		614,304		—
Real Estate Construction		—		—		—		—		269,291		269,291		—
Farm Real Estate		—		—		—		—		24,109		24,109		—
Lease Financing Receivables		237		52		653		942		47,317		48,259		—
Consumer and Other		156		59		9		224		18,043		18,267		—
Total	$	2,045	$	2,186	$	3,977	$	8,208	$	2,746,682	$	2,754,890	$	—

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 September 30, 2023.

September 30, 2023
	Nonaccrual loans with a related ACL		Nonaccrual loans without a related ACL		Total Nonaccrual loans		Interest Income Recognized
Commercial & Agriculture	$	362	$	1,294	$	1,656	$	—
Commercial Real Estate:
Owner Occupied		—		270		270		3
Non-Owner Occupied		306		899		1,205		—
Residential Real Estate		—		4,391		4,391		13
Real Estate Construction		—		203		203		—
Farm Real Estate		—		—		—		—
Lease Financing Receivables		151		794		945		—
Consumer and Other		—		43		43		—
Total	$	819	$	7,894	$	8,713	$	16

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.

September 30, 2023	Real Estate		Other		Allowance for Credit Losses
Commercial & Agriculture	$	—	$	4,846	$	408
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		1,205		—		306
Residential Real Estate		—		—		—
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Lease Financing Receivables		—		525		150
Consumer and Other		—		—		—
Total	$	1,205	$	5,371	$	864

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	$	3
Commercial Real Estate:
Owner Occupied		82		82				192		22
Non-Owner Occupied		—		—				35		1
Residential Real Estate		385		410				595		33
Farm Real Estate		—		—				381		14
Total		467		492				1,289		73
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		3
Commercial Real Estate:
Owner Occupied		232		232		6		406		22
Non-Owner Occupied		—		—		—		35		1
Residential Real Estate		392		421		1		614		33
Lease Financing Receivables		—		—		—		381		14
Consumer and Other		—		—		—		—		—
Total	$	624	$	653	$	7	$	1,522	$	73

The following tables include the average recorded investment and interest income recognized for impaired financing receivables for the three and nine-month periods ended September 30, 2022.

	September 30, 2022
For the three months ended	Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	172	$	—
Commercial Real Estate—Owner Occupied		504		3
Commercial Real Estate—Non-Owner Occupied		70		—
Residential Real Estate		503		9
Real Estate Construction		—		—
Farm Real Estate		247		2
Lease Financing Receivables		—		—
Consumer and Other		—		—
Total	$	1,496	$	14

	September 30, 2022
For the nine months ended	Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	86	$	—
Commercial Real Estate—Owner Occupied		349		10
Commercial Real Estate—Non-Owner Occupied		35		—
Residential Real Estate		516		19
Real Estate Construction		—		—
Farm Real Estate		381		14
Lease Financing Receivables		—		—
Consumer and Other		—		—
Total	$	1,367	$	43

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 September 30, 2022 were as follows, since acquisition:

	For the Three-Month Period Ended September 30, 2022
	(In Thousands)
Balance at beginning of period	$	216
Acquisition of PCI loans		—
Accretion		(7	)
Transfer from non-accretable to accretable		7
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 September 30, 2023:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Beginning of Period	$	3,851		—	—			—
CECL adoption adjustments		—		—		3,386		—
Charge-offs		—		—		—		—
Recoveries		—		—		—		—
Provision		130		—		595		—
End of Period	$	3,981	—		$	3,981		—