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Loans and Allowance for Credit Losses (Tables)
 12 Months Ended
Dec. 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 December 31, is as follows:

 
2023
    
2022
  
Commercial
  
$
106,897
    
$
106,771
  
Commercial Real Estate
    
721,729
      
645,166
  
Agriculture
    
105,838
      
114,040
  
Residential Mortgage
    
107,328
      
92,669
  
Residential Construction
    
12,323
      
10,167
  
Consumer
    
14,868
      
15,287
  
                 
     
1,068,983
      
984,100
  
Allowance for credit losses
    
(16,596
)
    
(14,792
)
Net deferred origination fees and costs
    
78

   
830
                 
Loans, net
  
$
1,052,465
    
$
970,138
  
Activity in ACL on Loans by Loan Class
The following table summarizes the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities as of December 31, 2023:
   
Allowance for Credit Losses – Year ended December 31, 2023
  
($ in thousands)
  
Beginning balance
    
Adoption of CECL
    
Charge-offs
    
Recoveries
    
Provision
(Recovery)
   
Ending Balance
  
Commercial
  
$
1,491
    
$
689
    
$
(366
)
  
$
235
    
$
(8
)
  
$
2,041
  
Commercial Real Estate
    
10,259
      
(513
)
    
—
      
—
      
1,118
      
10,864
  
Agriculture
    
1,789
      
(742
)
    
(2,567
)
    
2,567
      
(50
)
    
997
  
Residential Mortgage
    
896
      
923
      
(3
)
    
—
      
189
      
2,005
  
Residential Construction
    
181
      
221
      
—
      
—
      
(68
)
    
334
  
Consumer
    
176
      
222
      
(13
)
    
1
      
(31
)
    
355
  
Allowance for credit losses on loans
    
14,792
      
800
      
(2,949
)
    
2,803
      
1,150
      
16,596
  
Reserve for unfunded commitments
    
700
      
500
      
—
      
—
      
(50
)
    
1,150
  
Total
  
$
15,492
    
$
1,300
    
$
(2,949
)
  
$
2,803
    
$
1,100
    
$
17,746
  

The following tables summarize the activity in the allowance for credit losses by loan class for the year ended December 31, 2022:


 
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 loan losses
    
(119
)
    
1,265
      
275
      
138
      
104
      
44
      
(807
)
    
900
  
 
                                                                
Charge-offs
    
(297
)
    
—
      
—
      
—
      
—
      
(48
)
    
—
      
(345
)
Recoveries
    
275
      
—
      
—
      
—
      
—
      
10
      
—
      
285
  
Net charge-offs
    
(22
)
    
—
      
—
      
—
      
—
      
(38
)
    
—
      
(60
)
Ending Balance
    1,463       10,073       1,757       880       178       173       268       14,792  
Period-end amount allocated to:
                                                               
Loans individually evaluated for impairment
    —       —       —       75       —       2       —       77  
Loans collectively evaluated for impairment
    1,463       10,073       1,757       805       178       171       268       14,715  
Balance as of December 31, 2022
  
$
1,463
    
$
10,073
    
$
1,757
    
$
880
    
$
178
    
$
173
    
$
268
    
$
14,792
  

The Company’s investment in loans as of December 31, 2022 related to each balance in the allowance for credit losses by loan category and disaggregated on the basis of the Company’s impairment methodology was as follows:

 
  
Commercial
    
Commercial
Real Estate
    
Agriculture
    
Residential Mortgage
    
Residential Construction
    
Consumer
    
Total
  
December 31, 2022
  
Loans individually evaluated for impairment
  
$
—
    
$
—
    
$
7,416
    
$
622
    
$
—
    
$
701
    
$
8,739
  
Loans collectively evaluated for impairment
    
106,771
      
645,166
      
106,624
      
92,047
      
10,167
      
14,586
      
975,361
  
Ending Balance
  
$
106,771
    
$
645,166
    
$
114,040
    
$
92,669
    
$
10,167
    
$
15,287
    
$
984,100
  
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 as of December 31, 2023 and December 31, 2022:

December 31, 2023
  
($ in thousands)
  
Secured by 1-4
Family
Residential Properties-1st
lien
    
Secured by 1-4
Family
Residential
Properties-junior
lien
    
Secured by 1-4
Family
Residential
Properties-
revolving
    
Commercial
    
Construction
and land
development
    
Secured by
farmland
    
Agriculture
production
loans
    
Total
  
Commercial
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
Commercial Real Estate
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Agriculture
    
—
      
—
      
—
      
—
      
—
      
946
      
1,925
      
2,871
  
Residential Mortgage
    
424
      
—
      
—
      
—
      
—
      
—
      
—
      
424
  
Residential Construction
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Consumer
    
—
      
351
      
352
      
—
      
—
      
—
      
—
      
703
  
Total
  
$
424
    
$
351
    
$
352
    
$
—
    
$
—
    
$
946
    
$
1,925
    
$
3,998
  

December 31, 2022
  
($ in thousands)
  
Secured by 1-4
Family
Residential Properties-1st
lien
    
Secured by 1-4
Family
Residential
Properties-junior
lien
    
Secured by 1-4
Family
Residential
Properties-
revolving
    
Commercial
    
Construction
and land
development
    
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 December 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
  
December 31, 2023
                                                
Commercial
  
$
91
    
$
178
    
$
—
    
$
—
     $ 269     $ 106,628    
$
106,897
     $ —  
Commercial Real Estate
    
—
      
—
      
—
      
—
       —       721,729      
721,729
       —  
Agriculture
    
—
      
—
      
—
      
2,871
       2,871       102,967      
105,838
       2,871  
Residential Mortgage
    
976
      
—
      
916
      
424
       2,316       105,012      
107,328
       424  
Residential Construction
    
—
      
—
      
3,420
      
—
       3,420       8,903      
12,323
       —  
Consumer
    
194
      
—
      
—
      
703
       897       13,971      
14,868
       703  
Total
  
$
1,261
    
$
178
    
$
4,336
    
$
3,998
     $ 9,773     $ 1,059,210    
$
1,068,983
     $ 3,998  
                                                                 
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  
Impaired Loans
The following table presents information related to impaired loans as of December 31, 2022, as determined in accordance with ASC 310 prior to the adoption of ASU 2016-13:
 

   
Unpaid
Contractual
Principal
Balance
    
Recorded
Investment
with no
Allowance
    
Recorded
Investment
with
Allowance
    
Total
Recorded
Investment
    
Related
Allowance
  
December 31, 2022
                              
Commercial
  
$
 —    
$
 —    
$
 —    
$
 —    
$
 —  
Commercial Real Estate
     —       —       —       —       —  
Agriculture
     10,032       7,416       —       7,416       —  
Residential Mortgage
     673       123       499       622       75  
Residential Construction
     —       —       —       —       —  
Consumer
     822       637       64       701       2  
Total
  
$
 11,527    
$
 8,176    
$
 563    
$
 8,739    
$
 77  
Average Recorded Investment and Interest Income in Impaired Loans Recognized Using Accrual Basis Method of Accounting
The following table presents the average recorded investment in impaired loans and the amount of interest income recognized on impaired loans during the year ended December 31, 2022:

 
December 31, 2022
  
   
Average Recorded
Investment
    
Interest Income
Recognized
  
Commercial
  
$
 40    
$
 3  
Commercial Real Estate
     384       32  
Agriculture
     8,047       —  
Residential Mortgage
     639       19  
Residential Construction
     48       —  
Consumer
     737       21  
Total
  
$
 9,895    
$
 75  
Amortized Cost Basis of Loans Modified to Borrowers Experiencing Financial Difficulty and Financial Effects of Loan Modifications
The amortized cost basis of loans that were experiencing both financial difficulty and modification during the year ended December 31, 2023 were as follows:
($ in thousands)
  
Term Extension
    
Combination  Term Extension
and Interest Rate Reduction
    
Total Class of Financing
Receivable
  
 
                  
Commercial
  
$
1,990
    
$
41
      
1.90
%
Commercial Real Estate
    
—
      
395
      
0.05
%
Agriculture
    
4,005
      
—
      
3.78
%
Residential Mortgage
    
—
      
—
      
—
  
Residential Construction
    
3,420
      
—
      
27.75
%
Consumer
    
—
      
—
      
—
  
Total
  
$
9,415
    
$
436
      
0.92
%

The Company had no commitments to lend additional funds to borrowers whose loans were modified at December 31, 2023.
The following table presents the financial effect of the loan modifications to borrowers experiencing financial difficulty during the year ended December 31, 2023:
($ in thousands)
  
Weighted-Average
Interest Rate
Reduction
    
Weighted-Average
Term Extension (in
months)
  
Commercial
    
0.50
%
  
$
3
  
Commercial Real Estate
    
0.25
%
    
26
  
Agriculture
    
—
      
4
  
Residential Mortgage
    
—
      
—
  
Residential Construction
    
—
      
1
  
Consumer
    
—
      
—
  
Total
    
0.27
%
  
$
3
  

Loans modified as TDRs during the year ended December 31, 2022  were as follows:
   
Year Ended December 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 December 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. Revolving loans converted to term loans totaled $881 as of December 31, 2023.
 
(in thousands)
                 

 
Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2023
              
 
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Revolving
Loans
Amortized
Cost Basis
    
Total
  
Commercial
                                                
Pass
  
$
19,776
    
$
16,961
    
$
15,833
    
$
5,381
    
$
7,420
    
$
6,298
    
$
26,183
    
$
97,852
  
Special Mention
    
—
      
1,122
      
2,530
      
235
      
308
      
—
      
2,936
      
7,131
  
Substandard
    
—
      
32
      
1,152
      
542
      
—
      
—
      
188
      
1,914
  
Doubtful/Loss
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Total Commercial loans
  
$
19,776
    
$
18,115
    
$
19,515
    
$
6,158
    
$
7,728
    
$
6,298
    
$
29,307
    
$
106,897
  
Year-to-date Period Charge-offs
    
(47
)
    
(196
)
    
(36
)
    
—
      
(87
)
    
—
      
—
      
(366
)
Year-to-date Recoveries
    
—
      
—
      
—
      
—
      
87
      
148
      
—
      
235
  
Year-to-date Net Charge-offs
    
(47
)
    
(196
)
    
(36
)
    
—
      
—
      
148
      
—
      
(131
)
 
                                                                
Commercial Real Estate
                                                                
Pass
  
$
115,807
    
$
173,918
    
$
191,907
    
$
50,150
    
$
52,157
    
$
107,909
    
$
6,879
    
$
698,727
  
Special Mention
    
—
      
—
      
7,448
      
—
      
2,869
      
1,273
      
—
      
11,590
  
Substandard
    
395
      
—
      
1,712
      
1,684
      
6,604
      
1,017
      
—
      
11,412
  
Doubtful/Loss
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Total Commercial Real Estate loans
  
$
116,202
    
$
173,918
    
$
201,067
    
$
51,834
    
$
61,630
    
$
110,199
    
$
6,879
    
$
721,729
  
Year-to-date Charge-offs
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Year-to-date Recoveries
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Year-to-date Net Charge-offs
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
 
                                                                
Agriculture
                                                                
Pass
  
$
6,842
    
$
16,985
    
$
20,511
    
$
8,792
    
$
2,509
      
11,437
    
$
29,893
    
$
96,969
  
Special Mention
    
—
      
1,937
      
2,996
      
—
      
—
      
1,064
      
—
      
5,997
  
Substandard
    
—
      
—
      
946
      
—
      
1,926
      
—
      
—
      
2,872
  
Doubtful/Loss
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Total Agriculture loans
  
$
6,842
    
$
18,922
    
$
24,453
    
$
8,792
    
$
4,435
    
$
12,501
    
$
29,893
    
$
105,838
  
Year-to-date Charge-offs
    
(1,825
)
    
—
      
—
      
—
      
—
      
—
      
(742
)
    
(2,567
)
Year-to-date Recoveries
    
1,825
      
—
      
—
      
—
      
—
      
—
      
742
      
2,567
  
Year-to-date Net Charge-offs
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  

(in thousands)
                 

 
Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2023
              
 
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Revolving
Loans
Amortized
Cost Basis
    
Total
  
Residential Mortgage
                                                
Pass
  
$
20,239
    
$
24,906
    
$
26,429
    
$
14,500
    
$
5,481
    
$
15,349
    
$
—
    
$
106,904
  
Special Mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
—
      
39
      
—
      
—
      
385
      
—
      
424
  
Doubtful/Loss
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Total Residential Mortgage loans
  
$
20,239
    
$
24,906
    
$
26,468
    
$
14,500
    
$
5,481
    
$
15,734
    
$
—
    
$
107,328
  
Year-to-date Charge-offs
    
—
      
—
      
—
      
—
      
—
      
(3
)
    
—
      
(3
)
Year-to-date Recoveries
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Year-to-date Net Charge-offs
    
—
      
—
      
—
      
—
      
—
      
(3
)
    
—
      
(3
)
 
                                                                
Residential Construction
                                                                
Pass
  
$
3,714
    
$
1,991
    
$
3,198
    
$
—
    
$
—
    
$
—
    
$
—
    
$
8,903
  
Special Mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
3,420
      
—
      
—
      
—
      
—
      
—
      
3,420
  
Doubtful/Loss
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Total Residential Construction loans
  
$
3,714
    
$
5,411
    
$
3,198
    
$
—
    
$
—
    
$
—
    
$
—
    
$
12,323
  
Year-to-date Charge-offs
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Year-to-date Recoveries
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Year-to-date Net Charge-offs
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
 
                                                                
Consumer
                                                                
Pass
  
$
350
    
$
758
    
$
133
    
$
149
    
$
70
    
$
273
    
$
12,516
    
$
14,249
  
Special Mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
—
      
—
      
—
      
—
      
—
      
619
      
619
  
Doubtful/Loss
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Total Consumer loans
  
$
350
    
$
758
    
$
133
    
$
149
    
$
70
    
$
273
    
$
13,135
    
$
14,868
  
Year-to-date Charge-offs
    
(13
)
    
—
      
—
      
—
      
—
      
—
      
—
      
(13
)
Year-to-date Recoveries
    
—
      
—
      
—
      
—
      
—
      
1
      
—
      
1
  
Year-to-date Net Charge-offs
    
(13
)
    
—
      
—
      
—
      
—
      
1
      
—
      
(12
)
 
                                                                
Total Loans
                                                                
Pass
  
$
166,728
    
$
235,519
    
$
258,011
    
$
78,972
    
$
67,637
    
$
141,266
    
$
75,471
    
$
1,023,604
  
Special Mention
    
—
      
3,059
      
12,974
      
235
      
3,177
      
2,337
      
2,936
      
24,718
  
Substandard
    
395
      
3,452
      
3,849
      
2,226
      
8,530
      
1,402
      
807
      
20,661
  
Doubtful/Loss
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Total Loans
  
$
167,123
    
$
242,030
    
$
274,834
    
$
81,433
    
$
79,344
    
$
145,005
    
$
79,214
    
$
1,068,983
  
Year-to-date Charge-offs
  
$
(1,885
)
  
$
(196
)
  
$
(36
)
  
$
—
    
$
(87
)
  
$
(3
)
  
$
(742
)
  
$
(2,949
)
Year-to-date Recoveries
  
$
1,825
    
$
—
    
$
—
    
$
—
    
$
87
    
$
149
    
$
742
    
$
2,803
  
Year-to-date Net Charge-offs
  
$
(60
)
  
$
(196
)
  
$
(36
)
  
$
—
    
$
—
    
$
146
    
$
—
 
$
(146
)

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