XML 34 R24.htm IDEA: XBRL DOCUMENT v3.23.1
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables)
 3 Months Ended
Mar. 31, 2023
LOANS AND ALLOWANCE FOR CREDIT LOSSES [Abstract]  
Loan Portfolio, by Loan Class
The composition of the Company’s loan portfolio, by loan class, as of March 31, 2023 and December 31, 2022 was as follows:
 
($ in thousands)
  
March 31,
2023
    
December 31,
2022
  
 
            
Commercial
  
$
103,290
    
$
106,771
  
Commercial Real Estate
    
661,545
      
645,166
  
Agriculture
    
103,364
      
114,040
  
Residential Mortgage
    
93,339
      
92,669
  
Residential Construction
    
12,551
      
10,167
  
Consumer
    
15,204
      
15,287
  
 
    
989,293
      
984,100
  
Allowance for credit losses
    
(15,484
)
    
(14,792
)
Net deferred origination fees and costs
    
406
   
830
Loans, net
  
$
974,215
    
$
970,138
  
Activity in ACL on Loans by Loan Class
The following table summarizes the activity in the ACL on loans by loan class for the three months ended March 31, 2023.

Three months ended March 31, 2023
  
($ in thousands)
  
Commercial
    
Commercial
Real Estate
    
Agriculture
    
Residential
Mortgage
    
Residential
Construction
    
Consumer
    
Unallocated
    
Total
  
Balance as of December 31, 2022,
prior to adoption of ASC 326
  
$
1,463
    
$
10,073
    
$
1,757
    
$
880
    
$
178
    
$
173
    
$
268
    
$
14,792
  
Impact of adopting ASC 326
    623       (464 )     (671 )     834       200       201       77       800  
Balance as of January 1, 2023, post adoption of ASC 326
     2,086       9,609       1,086       1,714       378       374       345       15,592  
Provision for credit losses
    
(232
)
    
(454
)
    
(213
)
    
(33
)
    
39
      
(8
)
    
901
      
—
  
 
                                                                
Charge-offs
    
(127
)
    
—
      
—
      
(3
)
    
—
      
(1
)
    
—
      
(131
)
Recoveries
    
23
      
—
      
—
      
—
      
—
      
—
      
—
      
23
  
Net (charge-offs)/recoveries
    
(104
)
    
—
      
—
      
(3
)
    
—
      
(1
)
    
—
      
(108
)
Balance as of March 31, 2023
  
$
1,750
    
$
9,155
    
$
873
    
$
1,678
    
$
417
    
$
365
    
$
1,246
    
$
15,484
  
 

The following table summarizes the activity in the ACL by loan class for the three months ended March 31, 2022:

Three months ended March 31, 2022
  
($ in thousands)
  
Commercial
    
Commercial
Real Estate
    
Agriculture
    
Residential
Mortgage
    
Residential
Construction
    
Consumer
    
Unallocated
    
Total
  
Balance as of December 31, 2021
  
$
1,604
    
$
8,808
    
$
1,482
    
$
742
    
$
74
    
$
167
    
$
1,075
    
$
13,952
  
Provision for (reversal of) loan losses
    
136
      
572
      
125
      
12
      
61
      
25
      
(631
)
    
300
  
                                                                 
Charge-offs
    
—
      
—
      
—
      
—
      
—
      
(4
)
    
—
      
(4
)
Recoveries
    
7
      
—
      
—
      
—
      
—
      
3
      
—
      
10
  
Net (charge-offs)/recoveries
    
7
      
—
      
—
      
—
      
—
      
(1
)
    
—
      
6
  
Balance as of March 31, 2022
  
$
1,747
    
$
9,380
    
$
1,607
    
$
754
    
$
135
    
$
191
    
$
444
    
$
14,258
  

Amortized Cost of Collateral Dependent Loans by Class The following table presents the amortized cost basis of collateral-dependent loans by class, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans as of March 31, 2023 and December 31, 2022:

March 31, 2023
  
($ in thousands)
  
Secured by 1-4
Family Residential
Properties-1st lien
    
Secured by 1-4
Family Residential
Properties-revolving
    
Secured by farmland
    
Agriculture
production loans
    
Total
  
Commercial
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
Commercial Real Estate
    
—
      
—
      
—
      
—
      
—
  
Agriculture
    
—
      
—
      
1,148
      
6,268
      
7,416
  
Residential Mortgage
    
119
      
—
      
—
      
—
      
119
  
Residential Construction
    
—
      
—
      
—
      
—
      
—
  
Consumer
    
—
      
620
      
—
      
—
      
620
  
Total
  
$
119
    
$
620
    
$
1,148
    
$
6,268
    
$
8,155
  

December 31, 2022
  
($ in thousands)
  
Secured by 1-4
Family Residential
Properties-1st lien
    
Secured by 1-4
Family Residential
Properties-revolving
    
Secured by farmland
    
Agriculture
production loans
    
Total
  
Commercial
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
Commercial Real Estate
    
—
      
—
      
—
      
—
      
—
  
Agriculture
    
—
      
—
      
1,148
      
6,268
      
7,416
  
Residential Mortgage
    
123
      
—
      
—
      
—
      
123
  
Residential Construction
    
—
      
—
      
—
      
—
      
—
  
Consumer
    
—
      
637
      
—
      
—
      
637
  
Total
  
$
123
    
$
637
    
$
1,148
    
$
6,268
    
$
8,176
  
Loans by Delinquency and Non-Accrual Status
The Company’s loans by delinquency and non-accrual status, as of March 31, 2023 and December 31, 2022, was as follows:

($ in thousands)
  
30-59 days
Past Due &
Accruing
    
60-89 days
Past Due &
Accruing
    
90 days or
More Past
Due &
Accruing
    
Nonaccrual
Loans
    
Total Past
Due & Nonaccrual
Loans
    
Current &
Accruing
Loans
    
Total Loans
    
Nonaccrual
loans with
No ACL
  
March 31, 2023
                                                
Commercial
  
$
747
    
$
49
    
$
403
    
$
—
     $ 1,199     $ 102,091    
$
103,290
     $ —  
Commercial Real Estate
    
—
      
—
      
—
      
—
       —       661,545      
661,545
       —  
Agriculture
    
—
      
—
      
—
      
7,416
       7,416       95,948      
103,364
       7,416  
Residential Mortgage
    
887
      
—
      
—
      
119
       1,006       92,333      
93,339
       119  
Residential Construction
    
—
      
—
      
—
      
—
       —       12,551      
12,551
       —  
Consumer
    
775
      
—
      
—
      
620
       1,395       13,809      
15,204
       620  
Total
  
$
2,409
    
$
49
    
$
403
    
$
8,155
     $ 11,016     $ 978,277    
$
989,293
     $ 8,155  
 
                                                                
December 31, 2022
                                                                
Commercial
  
$
41
    
$
—
    
$
403
    
$
—
     $
444     $
106,327    
$
106,771
     $
—  
Commercial Real Estate
    
—
      
—
      
—
      
—
       —       645,166      
645,166
       —  
Agriculture
    
—
      
—
      
—
      
7,416
       7,416       106,624      
114,040
       7,416  
Residential Mortgage
    
—
      
—
      
—
      
123
       123       92,546      
92,669
       123  
Residential Construction
    
—
      
—
      
—
      
—
       —       10,167      
10,167
       —  
Consumer
    
—
      
—
      
—
      
637
       637       14,650      
15,287
       637  
Total
  
$
41
    
$
—
    
$
403
    
$
8,176
     $ 8,620     $ 975,480    
$
984,100
     $ 8,176  
Amortized Cost Basis of Loans Modified to Borrowers Experiencing Financial Difficulty and Financial Effects of Loan Modifications
The following table presents the amortized cost basis of loans at March 31, 2023 that were both experiencing financial difficulty and modified during the period ended March 31, 2023, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.
($ in thousands)
  
Term Extension
    
Combination Term Extension
and Interest Rate Reduction
    
Total Class of Financing
Receivable
  
March 31, 2023
                  
Commercial
  
$
250
    
$
50
      
0.29
%
Commercial Real Estate
    
—
      
—
      
—
  
Agriculture
    
—
      
—
      
—
  
Residential Mortgage
    
—
      
—
      
—
  
Residential Construction
    
—
      
—
      
—
  
Consumer
    
—
      
—
      
—
  
Total
  
$
250
    
$
50
      
0.29
%

The Company had no commitments to lend additional funds to borrowers whose loans were modified at March 31, 2023.

The following table presents the financial effect of the loan modifications to borrowers experiencing financial difficulty for the three-month period ended March 31, 2023:

($ in thousands)
  
Weighted-Average
Interest Rate
Reduction
    
Weighted-Average
Term Extension
(in months)
  
Commercial
    
0.50
%
  
$
9
  
Commercial Real Estate
    
—
      
—
  
Agriculture
    
—
      
—
  
Residential Mortgage
    
—
      
—
  
Residential Construction
    
—
      
—
  
Consumer
    
—
      
—
  
Total
    
0.50
%
  
$
9
  


Loans modified as TDRs during the three months ended March 31, 2022 were as follows:

($ in thousands)
  
Three months ended March 31, 2022
  
   
Number of
Contracts
    
Pre-
modification
outstanding
recorded
investment
    
Post-
modification
outstanding
recorded
investment
  
Consumer
    
1
    
$
75
    
$
75
  
Total
    
1
    
$
75
    
$
75
  
Risk Ratings by Loan Class
The following tables present the loan portfolio by loan class, origination year, and internal risk rating as of March 31, 2023. Generally, existing term loans that were re-underwritten are reflected in the table in the year of renewal. Lines of credit that have a conversion feature at the time of origination, such as construction to permanent loans, are presented by year of origination.


(in thousands)
                                                
   
Term Loans Amortized Cost Basis by Origination Year - As of March 31, 2023
              
   
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
 Revolving
Loans
Amortized
Cost Basis
    
Total
  
Commercial
                                                
Pass
  
$
1,178
    
$
21,990
    
$
25,632
    
$
7,214
    
$
9,538
    
$
10,088
     $
24,307    
$
99,947
  
Special Mention
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Substandard
    
50
      
—
      
2,411
      
583
      
—
      
—
       299      
3,343
  
Doubtful/Loss
     —       —       —       —       —       —       —       —  
Total Commercial loans
  
$
1,228
     $ 21,990    
$
28,043
    
$
7,797
    
$
9,538
    
$
10,088
     $
24,606    
$
103,290
  
Current Period Write-offs
    
—
      
(41
)
    
—
      
—
      
(86
)
    
—
       —      
(127
)
Current Period Recoveries
    
—
      
—
      
—
      
—
      
—
      
23
       —      
23
  
Current Period Net Write-offs
    
—
      
(41
)
    
—
      
—
      
(86
)
    
23
       —      
(104
)
                                                                 
Commercial Real Estate
                                                                
Pass
  
$
26,972
    
$
171,926
    
$
203,578
    
$
46,080
    
$
61,457
    
$
129,969
     $
7,116    
$
647,098
  
Special Mention
    
—
      
—
      
—
      
863
      
3,692
      
—
       —      
4,555
  
Substandard
    
—
      
—
      
173
      
2,622
      
6,064
      
1,033
       —      
9,892
  
Doubtful/Loss
     —       —       —       —       —       —       —       —  
Total Commercial Real Estate loans
  
$
26,972
     $ 171,926    
$
203,751
    
$
49,565
    
$
71,213
    
$
131,002
     $
7,116    
$
661,545
  
Current Period Write-offs
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Current Period Recoveries
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Current Period Net Write-offs
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
                                                                 
Agriculture
                                                                
Pass
  
$
5,292
    
$
20,525
    
$
24,483
    
$
9,082
    
$
4,483
      
12,114
     $
18,905    
$
94,884
  
Special Mention
    
—
      
—
      
—
      
—
      
—
      
1,064
       —      
1,064
  
Substandard
    
—
      
—
      
1,148
      
—
      
—
      
—
       6,268      
7,416
  
Doubtful/Loss
     —       —       —       —       —       —       —       —  
Total Agriculture loans
  
$
5,292
     $ 20,525    
$
25,631
    
$
9,082
    
$
4,483
    
$
13,178
     $
25,173    
$
103,364
  
Current Period Write-offs
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Current Period Recoveries
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Current Period Net Write-offs
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
 
(in thousands)
                                                
   
Term Loans Amortized Cost Basis by Origination Year - As of March 31, 2023
              
   
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Revolving
Loans
Amortized
Cost Basis
    
Total
  
Residential Mortgage
                                                
Pass
  
$
3,643
    
$
24,392
    
$
27,350
    
$
14,680
    
$
6,205
    
$
16,716
     $
—    
$
92,986
  
Special Mention
    
—
      
—
      
—
      
—
      
—
      
195
       —      
195
  
Substandard
    
—
      
39
      
—
      
—
      
—
      
119
       —      
158
  
Doubtful/Loss
     —       —       —       —       —       —       —       —  
Total Residential Mortgage loans
  
$
3,643
    
$
24,431
    
$
27,350
    
$
14,680
    
$
6,205
    
$
17,030
     $
—    
$
93,339
  
Current Period Write-offs
    
—
      
—
      
—
      
—
      
—
      
(3
)
     —      
(3
)
Current Period Recoveries
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Current Period Net Write-offs
    
—
      
—
      
—
      
—
      
—
      
(3
)
     —      
(3
)
                                                                 
Residential Construction
                                                                
Pass
  
$
115
    
$
8,378
    
$
3,594
    
$
464
    
$
—
    
$
—
     $
—    
$
12,551
  
Special Mention
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Substandard
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Doubtful/Loss
     —       —       —       —       —       —       —       —  
Total Residential Construction loans
  
$
115
    
$
8,378
    
$
3,594
    
$
464
    
$
—
    
$
—
     $
—    
$
12,551
  
Current Period Write-offs
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Current Period Recoveries
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Current Period Net Write-offs
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
                                                                 
Consumer
                                                                
Pass
  
$
234
    
$
897
    
$
173
    
$
207
    
$
82
    
$
443
     $
12,548    
$
14,584
  
Special Mention
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Substandard
    
—
      
—
      
—
      
—
      
—
      
—
       620      
620
  
Doubtful/Loss
     —       —       —       —       —       —       —       —  
Total Consumer loans
  
$
234
    
$
897
    
$
173
    
$
207
    
$
82
    
$
443
     $
13,168    
$
15,204
  
Current Period Write-offs
    
(1
)
    
—
      
—
      
—
      
—
      
—
       —      
(1
)
Current Period Recoveries
    
—
      
—
      
—
      
—
      
—
      
—
       —      
—
  
Current Period Net Write-offs
    
(1
)
    
—
      
—
      
—
      
—
      
—
       —      
(1
)
                                                                 
Total Loans                                                                
Pass
   $
37,434     $
248,108     $
284,810     $
77,727     $
81,765     $
169,330     $
62,876     $
962,050  
Special Mention
     —       —       —       863       3,692       1,259       —       5,814  
Substandard
     50       39       3,732       3,205       6,064       1,152       7,187       21,429  
Doubtful/Loss
     —       —       —       —       —       —       —       —  
Total Loans
  
$
37,484
    
$
248,147
    
$
288,542
    
$
81,795
    
$
91,521
    
$
171,741
     $
70,063    
$
989,293
  
Current Period Write-offs
  
$
(1
)
  
$
(41
)
  
$
—
    
$
—
    
$
(86
)
  
$
(3
)
   $
—    
$
(131
)
Current Period Recoveries
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
23
     $
—    
$
23
  
Current Period Net Write-offs
  
$
(1
)
  
$
(41
)
  
$
—
    
$
—
    
$
(86
)
  
$
20
     $
—    
$
(108
)

The following table presents the risk ratings by loan class as of December 31, 2022.

   
Pass
    
Special Mention
    
Substandard
    
Doubtful
    
Loss
    
Total
  
December 31, 2022
                                    
Commercial
  
$
106,643
    
$
—
    
$
128
    
$
—
    
$
—
    
$
106,771
  
Commercial Real Estate
    
631,693
      
6,748
      
6,725
      
—
      
—
      
645,166
  
Agriculture
    
105,560
      
1,064
      
7,416
      
—
      
—
      
114,040
  
Residential Mortgage
    
92,299
      
207
      
163
      
—
      
—
      
92,669
  
Residential Construction
    
10,167
      
—
      
—
      
—
      
—
      
10,167
  
Consumer
    
14,650
      
—
      
637
      
—
      
—
      
15,287
  
Total
  
$
961,012
    
$
8,019
    
$
15,069
    
$
—
    
$
—
    
$
984,100