XML 21 R10.htm IDEA: XBRL DOCUMENT v3.24.1.u1
LOANS HELD FOR INVESTMENT
 3 Months Ended
Mar. 31, 2024
LOANS HELD FOR INVESTMENT [Abstract]  
LOANS HELD FOR INVESTMENT
3.  LOANS HELD FOR INVESTMENT

Loans held for investment are summarized by category as of the periods presented below (dollars in thousands):

 
March 31,
2024
    
December 31,
2023
  
Commercial real estate
  
$
1,110,283
    
$
1,081,056
  
Commercial - specialized
    
351,546
      
372,376
  
Commercial - general
    
527,576
      
517,361
  
Consumer:
                
1-4 family residential
    
545,116
      
534,731
  
Auto loans
    
292,389
      
305,271
  
Other consumer
    
71,698
      
74,168
  
Construction
    
113,191
      
129,190
  
     
3,011,799
      
3,014,153
  
Allowance for credit losses on loans
    
(42,174
)
    
(42,356
)
Loans, net
  
$
2,969,625
    
$
2,971,797
  

The Company has certain lending policies, underwriting standards, and procedures in place that are designed to maximize loan income with an acceptable level of risk. Management reviews and approves these policies, underwriting standards, and procedures on a regular basis and makes changes as appropriate. Management receives frequent reports related to loan originations, quality, concentrations, delinquencies, non-performing, and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions, both by type of loan and geography.

Commercial Real Estate – Underwriting standards have been designed to determine whether the borrower possesses sound business ethics and practices, evaluate current and projected cash flows to determine the ability of the borrower to repay their obligations as agreed and ensure appropriate collateral is obtained to secure the loan. Commercial real estate loans are underwritten primarily based on projected cash flows for income-producing properties and collateral values for non-income-producing properties. The repayment of these loans is generally dependent on the successful operation of the property securing the loans or the sale or refinancing of the property. Real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s real estate portfolio are diversified by type and geographic location. This diversity helps reduce the exposure to adverse economic events that affect any single market or industry.

Commercial – General and Specialized – Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably. Underwriting standards have been designed to determine whether the borrower possesses sound business ethics and practices, evaluate current and projected cash flows to determine the ability of the borrower to repay their obligations, as agreed and ensure appropriate collateral is obtained to secure the loan. Commercial loans are primarily made based on the identified cash flows of the borrower and, secondarily, on the underlying collateral provided by the borrower. Most commercial loans are secured by the assets being financed or other business assets, such as real estate, accounts receivable, or inventory, and typically include personal guarantees. Owner-occupied real estate is included in commercial loans, as the repayment of these loans is generally dependent on the operations of the commercial borrower’s business rather than on income-producing properties or the sale of the properties. Commercial loans are grouped into two distinct sub-categories: specialized and general. Commercial related segments that are considered “specialized” include agricultural production and real estate loans, energy loans, and finance, investment, and insurance loans. Commercial related segments that contain a broader diversity of borrowers, sub-industries, or serviced industries are grouped into the “general category.” These include goods, services, restaurant & retail, construction, and other industries. Performance of these loans is subject to operating and cash flow results of the borrower, with risk in the volatility of operating results for particular industries.
Consumer – Loans to consumers include 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. The Company utilizes a computer-based credit scoring analysis to supplement its policies and procedures in underwriting consumer loans. The Company’s loan policy addresses types of consumer loans that may be originated and the collateral, if secured, which must be perfected. The relatively smaller individual dollar amounts of consumer loans that are spread over numerous individual borrowers also minimizes the Company’s risk. The Company generally requires mortgage title insurance and hazard insurance on 1-4 family residential loans. All consumer loans are generally dependent on the risk characteristics of the borrower’s ability to repay the loan, a consideration of the debt to income ratio, employment and income stability, the loan-to-value ratio, and the age, condition and marketability of the collateral.

Construction – Loans for residential construction are for single-family properties to developers, builders, or end-users. These loans are underwritten based on estimates of costs and completed value of the project. Funds are advanced based on estimated percentage of completion for the project. Performance of these loans is affected by economic conditions as well as the ability to control costs of the projects.

The ACL for loans was $42.2 million at March 31, 2024, compared to $42.4 million at December 31, 2023. The ACL for loans to loans held for investment was 1.40% at March 31, 2024 and 1.41% at December 31, 2023.

The following tables detail the activity in the ACL for loans for the periods indicated (dollars in thousands). Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

 
Beginning
Balance
    
Provision for
Credit Losses(1)
    
Charge-offs
     Recoveries    
Ending
Balance
  
For the three months ended March 31, 2024
                              
Commercial real estate
   $ 15,808     $ 62     $ (86 )   $ —     $ 15,784  
Commercial - specialized
     4,020       (205 )     —       33       3,848  
Commercial - general
     6,391       659       (375 )     33       6,708  
Consumer:
                                        
1-4 family residential
     9,177       273       (172 )     2       9,280  
Auto loans
     3,601       (27 )     (224 )     65       3,415  
Other consumer
     968       238       (282 )     59       983  
Construction
     2,391       (235 )     —       —       2,156  

  $ 42,356     $ 765     $ (1,139 )   $ 192     $ 42,174  

(1) The $830 thousand provision for credit loss on the consolidated statement of comprehensive income (loss) includes a $765 thousand provision for credit losses on loans and a $65 thousand provision for off-balance sheet credit exposures for the three months ended March 31, 2024.


  
Beginning
Balance
    
Impact of
CECL
Adoption
    
Provision for
Credit
Losses(1)
    
Charge-offs
    
Recoveries
    
Ending
Balance
  
For the three months ended March 31, 2023
                                    
Commercial real estate
   $ 13,029     $ 827     $ (475 )   $ —     $ —     $ 13,381  
Commercial - specialized
     3,425       33       (11 )     —       63       3,510  
Commercial - general
     9,215       (2,574 )     (237 )     (199 )     62       6,267  
Consumer:
                                                
1-4 family residential
     6,194       1,700       635       —       2       8,531  
Auto loans
     3,926       (332 )     298       (254 )     76       3,714  
Other consumer
     1,376       (235 )     68       (214 )     106       1,101  
Construction
     2,123       683       522       (272 )     —       3,056  

  $ 39,288     $ 102     $ 800     $ (939 )
   $ 309     $ 39,560  

(1) The $1.0 million provision for credit loss on the consolidated statement of comprehensive income (loss) includes a $800 thousand provision for credit losses on loans and a $210 thousand provision for off-balance sheet credit exposures for the three months ended March 31, 2023.

The decrease in the provision for credit losses during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was primarily due to the change in unfunded loan commitments decreasing during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

The following tables show the Company’s amortized cost in loans and related ACL for collateral dependent loans by class using the fair value of collateral loss estimation methodology of evaluating expected credit losses at the dates indicated (dollars in thousands).

   
Equipment
    
Real Estate
    
Other
    
Total Loans Individually Evaluated
    
Total ACL
for Individually Evaluated Loans
  
March 31, 2024
                              
Commercial real estate
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
Commercial - specialized
    
—
      
—
      
—
      
—
      
—
  
Commercial - general
    
290
      
—
      
—
      
290
      
62
  
Consumer:
                                        
1-4 family residential
    
—
      
—
      
—
      
—
      
—
  
Auto loans
    
—
      
—
      
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
      
—
      
—
  
Construction
    
—
      
—
      
—
      
—
      
—
  
   
$
290
    
$
—
    
$
—
    
$
290
    
$
62
  

   
Equipment
    
Real Estate
    
Other
    
Total Loans Individually Evaluated
    
Total ACL for Individually Evaluated Loans
  
December 31, 2023
                              
Commercial real estate
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
Commercial - specialized
    
—
      
—
      
—
      
—
      
—
  
Commercial - general
    
353
      
691
      
—
      
1,044
      
142
  
Consumer:
                                        
1-4 family residential
    
—
      
362
      
—
      
362
      
—
  
Auto loans
    
—
      
—
      
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
      
—
      
—
  
Construction
    
—
      
218
      
—
      
218
      
—
  
   
$
353
    
$
1,271
    
$
—
    
$
1,624
    
$
142
  

The tables below provides an age analysis on accruing past-due loans and nonaccrual loans at the dates indicated (dollars in thousands):

 
  
30-89 Days
Past Due
    
90 Days or
More Past
Due
    
Nonaccrual
    
Nonaccrual
with no
ACL
  
March 31, 2024
                        
Commercial real estate
  
$
363
    
$
16
    
$
—
    
$
—
  
Commercial - specialized
    
284
      
—
      
698
      
521
  
Commercial - general
    
615
      
266
      
474
      
58
  
Consumer:
                                
1-4 Family residential
    
1,502
      
821
      
812
      
—
  
Auto loans
    
692
      
136
      
—
      
—
  
Other consumer
    
722
      
129
      
28
      
—
  
Construction
    
96
      
—
      
—
      
—
  
 
  
$
4,274
    
$
1,368
    
$
2,012
    
$
579
  

 
30-89 Days
Past Due
    
90 Days or
More Past Due
    
Nonaccrual
    
Nonaccrual
with no
ACL
  
December 31, 2023
                        
Commercial real estate
  
$
499
    
$
86
    
$
—
     $ —  
Commercial - specialized
    
521
      
—
      
213
       —  
Commercial - general
    
1,316
      
296
      
953
       —  
Consumer:
                                
1-4 Family residential
    
793
      
1,390
      
1,828
       362  
Auto loans
    
1,208
      
60
      
—
       —  
Other consumer
    
1,134
      
103
      
30
       —  
Construction
    
759
      
—
      
218
       218  

 
$
6,230
    
$
1,935
    
$
3,242
     $ 580  

Credit Quality Indicators
The Company grades its loans on a thirteen-point grading scale. These grades fit in one of the following categories: (i) pass, (ii) special mention, (iii) substandard, (iv) doubtful, or (v) loss. Loans categorized as loss are charged-off immediately. The grading of loans reflect a judgment by the Company about the risks of default associated with the loan. The Company reviews the grades on loans as part of the Company’s on-going monitoring of the credit quality of the loan portfolio.  These risk ratings are assigned based on relevant information about the ability of the borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.

Pass loans have financial factors or nature of collateral that are considered reasonable credit risks in the normal course of lending and encompass several grades that are assigned based on varying levels of risk, ranging from credits that are secured by cash or marketable securities, to watch credits which have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring.

Special mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects for the loans at some future date.

Substandard loans are inadequately protected by the current net worth and paying capacity of the borrower or by the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize collection and present the distinct possibility that some loss will be sustained if the deficiencies are not corrected. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed. Substandard loans can be accruing or can be nonaccrual depending on the circumstances of the individual loans.

Doubtful loans have all the weaknesses inherent in substandard loans with the added characteristics that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. All doubtful loans are on nonaccrual.

In connection with the review of the Company’s loan portfolio, management considers risk elements attributable to particular loan type or categories in assessing the quality of individual loans. The list of loans to be analyzed for individual evaluation consists of non-accrual loans over $250 thousand with direct exposure. Interest income recognized using a cash-basis method on non-accrual loans for the three months ended March 31, 2024 and 2023 was not significant.  In addition, the Company closely monitors substandard accruing loans over $1 million with direct exposure, and past due accruing loans over $100 thousand for possible individual evaluation.  All other loans will be evaluated collectively in designated pools unless a loss exposure has been identified. Additional funds committed to be advanced on individually analyzed loans are not significant.

The following tables reflect the amortized cost basis in loans held for investment by credit quality indicator and origination year at the dates indicated, and related year-to-date gross charge-offs. Loans acquired are shown in the table by origination year. The Company had an immaterial amount of revolving loans converted to term loans at March 31, 2024 and December 31, 2023.

 
                    
Term Loans
                    
 
              
Amortized Cost Basis by Origination Year
March 31, 2024
              
 
                                                
(Dollars in thousands)
  
2024
    
2023
    
2022
    
2021
    
2020
    
Prior
    
Revolving Loans
    
Total
  

                                               
Commercial real estate
                                               
Pass
  
$
36,646
    
$
269,179
    
$
333,666
    
$
178,208
    
$
48,271
    
$
203,508
    
$
6,939
    
$
1,076,417
  
Special mention
    
—
      
—
      
—
      
—
      
454
      
5,599
      
—
      
6,053
  
Substandard
     —       —       —       25,924       1,680       209       —       27,813  
Total commercial real estate loans
  
$
36,646
    
$
269,179
    
$
333,666
    
$
204,132
    
$
50,405
    
$
209,316
    
$
6,939
    
$
1,110,283
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
64
    
$
—
    
$
—
    
$
22
    
$
—
    
$
86
  
 
                                                                
Commercial - specialized
                                                                
Pass
  
$
34,312
    
$
86,809
    
$
50,711
    
$
53,529
    
$
18,133
    
$
29,576
    
$
74,554
    
$
347,624
  
Special mention
    
—
      
—
      
2,595
      
—
      
—
      
—
      
—
      
2,595
  
Substandard
     —       212       104       10       370       631       —       1,327  
Total commercial - specialized loans
  
$
34,312
    
$
87,021
    
$
53,410
    
$
53,539
    
$
18,503
    
$
30,207
    
$
74,554
    
$
351,546
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
 
                                                                
Commercial - general
                                                                
Pass
  
$
14,247
    
$
84,488
    
$
123,542
    
$
89,825
    
$
34,812
    
$
99,454
    
$
71,815
    
$
518,183
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
250
      
250
  
Substandard
     —       106       2,765       4,644       121       1,142       365       9,143  
Total commercial - general loans
  
$
14,247
    
$
84,594
    
$
126,307
    
$
94,469
    
$
34,933
    
$
100,596
    
$
72,430
    
$
527,576
  
Year-to-date gross charge-offs
  
$
—
    
$
123
    
$
210
    
$
4
    
$
—
    
$
38
    
$
—
    
$
375
  

                                                               
Consumer 1-4 family residential
                                                                
Pass
  
$
23,811
    
$
110,045
    
$
154,624
    
$
104,760
    
$
50,440
    
$
83,667
    
$
4,583
    
$
531,930
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
     —       376       350       4,164       680       7,569       47       13,186  
Total consumer 1-4 family residential loans
  
$
23,811
    
$
110,421
    
$
154,974
    
$
108,924
    
$
51,120
    
$
91,236
    
$
4,630
    
$
545,116
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
121
    
$
51
    
$
—
    
$
—
    
$
—
    
$
172
  
 
                                                                
Consumer auto loans
                                                                
Pass
  
$
19,810
      
98,205
      
111,516
      
42,328
      
13,774
      
6,236
      
—
      
291,869
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
     —       30       126       246       31       87       —       520  
Total consumer auto loans
  
$
19,810
    
$
98,235
    
$
111,642
    
$
42,574
    
$
13,805
    
$
6,323
    
$
—
    
$
292,389
  
Year-to-date gross charge-offs
  
$
—
    
$
65
    
$
119
    
$
26
    
$
8
    
$
6
    
$
—
    
$
224
  
 
                                                                
Consumer other consumer
                                                                
Pass
  
$
6,596
    
$
20,664
    
$
23,499
    
$
8,840
    
$
2,605
    
$
7,653
    
$
1,575
    
$
71,432
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
     —       84       53       41       8       79       1       266  
Total consumer other consumer loans
  
$
6,596
    
$
20,748
    
$
23,552
    
$
8,881
    
$
2,613
    
$
7,732
    
$
1,576
    
$
71,698
  
Year-to-date gross charge-offs (1)
  
$
62
    
$
101
    
$
61
    
$
24
    
$
—
    
$
34
    
$
—
    
$
282
  

Construction
                                                
Pass
  
$
9,642
    
$
62,805
    
$
31,707
    
$
2,635
    
$
331
    
$
—
    
$
4,840
    
$
111,960
  
Special mention
    
—
      
315
      
—
      
820
      
—
      
—
      
—
      
1,135
  
Substandard
     —       —       96       —       —       —       —       96  
Total construction loans
  
$
9,642
    
$
63,120
    
$
31,803
    
$
3,455
    
$
331
    
$
—
    
$
4,840
    
$
113,191
  
Year-to-date gross charge-offs
  $
—     $
—     $
—     $
—     $
—     $
—     $
—     $
—  

 
(1)
Includes $62 thousand in charged-off demand deposit overdrafts reported as 2024 originations.

                     
Term Loans
                    
               
Amortized Cost Basis by Origination Year
December 31, 2023
              
                                                 
(Dollars in thousands)
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Revolving Loans
    
Total
  
                                                 
Commercial real estate
                                                
Pass
  
$
254,766
    
$
324,601
    
$
189,211
    
$
50,660
    
$
47,988
    
$
174,859
    
$
3,842
    
$
1,045,927
  
Special mention
    
—
      
—
      
—
      
11,677
      
—
      
—
      
—
      
11,677
  
Substandard
    
—
      
82
      
21,152
      
1,699
      
149
      
370
      
—
      
23,452
  
Total commercial real estate loans
  
$
254,766
    
$
324,683
    
$
210,363
    
$
64,036
    
$
48,137
    
$
175,229
    
$
3,842
    
$
1,081,056
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
 
                                                                
Commercial - specialized
                                                                
Pass
  
$
117,912
    
$
56,152
    
$
57,839
    
$
19,883
    
$
10,376
    
$
22,758
    
$
83,368
    
$
368,288
  
Special mention
    
—
      
2,938
      
—
      
—
      
—
      
—
      
300
      
3,238
  
Substandard
    
—
      
105
      
196
      
393
      
19
      
137
      
—
      
850
  
Total commercial - specialized loans
  
$
117,912
    
$
59,195
    
$
58,035
    
$
20,276
    
$
10,395
    
$
22,895
    
$
83,668
    
$
372,376
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
11
    
$
—
    
$
—
    
$
—
    
$
11
  
                                                                 
Commercial - general
                                                                
Pass
  
$
88,911
    
$
128,627
    
$
90,957
    
$
35,794
    
$
45,660
    
$
68,990
    
$
44,131
    
$
503,070
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
1,565
      
250
      
1,815
  
Substandard
    
201
      
2,930
      
4,676
      
227
      
2,749
      
1,442
      
251
      
12,476
  
Total commercial - general loans
  
$
89,112
    
$
131,557
    
$
95,633
    
$
36,021
    
$
48,409
    
$
71,997
    
$
44,632
    
$
517,361
  
Year-to-date gross charge-offs
  
$
—
    
$
47
    
$
50
    
$
33
    
$
18
    
$
321
    
$
—
    
$
469
  
                                                                 
Consumer 1-4 family residential
                                                                
Pass
  
$
113,897
    
$
156,549
    
$
106,619
    
$
51,940
    
$
31,345
    
$
56,666
    
$
3,770
    
$
520,786
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
376
      
382
      
4,238
      
708
      
3,758
      
4,483
      
—
      
13,945
  
Total consumer 1-4 family residential loans
  
$
114,273
    
$
156,931
    
$
110,857
    
$
52,648
    
$
35,103
    
$
61,149
    
$
3,770
    
$
534,731
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
1
    
$
—
    
$
—
    
$
—
    
$
—
    
$
1
  
                                                                 
Consumer auto loans
                                                                
Pass
  
$
106,149
      
124,588
      
48,686
      
16,524
      
6,812
      
1,935
      
—
      
304,694
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
16
      
189
      
199
      
60
      
81
      
32
      
—
      
577
  
Total consumer auto loans
  
$
106,165
    
$
124,777
    
$
48,885
    
$
16,584
    
$
6,893
    
$
1,967
    
$
—
    
$
305,271
  
Year-to-date gross charge-offs
  
$
113
    
$
377
    
$
254
    
$
14
    
$
49
    
$
81
    
$
—
    
$
888
  
                                                                 
Consumer other consumer
                                                                
Pass
  
$
23,719
    
$
26,899
    
$
10,198
    
$
3,190
    
$
2,539
    
$
6,107
    
$
1,364
    
$
74,016
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
13
      
44
      
10
      
—
      
84
      
1
      
152
  
Total consumer other consumer loans
  
$
23,719
    
$
26,912
    
$
10,242
    
$
3,200
    
$
2,539
    
$
6,191
    
$
1,365
    
$
74,168
  
Year-to-date gross charge-offs (1)
  
$
624
    
$
244
    
$
88
    
$
32
    
$
72
    
$
80
    
$
—
    
$
1,140
  
                                                 
Construction
                                                
Pass
  
$
61,903
    
$
53,930
    
$
5,511
    
$
331
    
$
—
    
$
—
    
$
6,250
    
$
127,925
  
Special mention
    
131
      
—
      
820
      
—
      
—
      
—
      
—
      
951
  
Substandard
    
—
      
314
      
—
      
—
      
—
      
—
      
—
      
314
  
Total construction loans
  
$
62,034
    
$
54,244
    
$
6,331
    
$
331
    
$
—
    
$
—
    
$
6,250
    
$
129,190
  
Year-to-date gross charge-offs
  
$
48
    
$
—
    
$
271
    
$
—
    
$
—
    
$
—
    
$
—
    
$
319
  

 
(1)
Includes $574 thousand in charged-off demand deposit overdrafts reported as 2023 originations.

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extensions, an other than insignificant payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. Typically, one type of concession, such as term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. In some cases, the Company provides multiple types of concessions on one loan. For the loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period.

The following tables present the amortized cost basis of loans at the dates indicated that were both experiencing financial difficulty and modified during the three months ended March 31, 2024 and 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 (dollars in thousands):

 
  
Payment
Delay
    
Term
Extension
    
Interest Rate Reduction
    
Term
Extension
and Interest
Rate Reduction
    
Total Class of
Financing
Receivable
  
March 31, 2024
                              
Commercial real estate
  
$
—
    
$
—
    
$
—
     $ —      
0.00
%
Commercial - specialized
    
—
      
—
      
—
       —      
0.00
%
Commercial - general
    
—
      
—
      
—
       35      
0.01
%
Consumer:
                                        
1-4 family
    
—
      
—
      
—
       —      
0.00
%
Auto loans
    
—
      
—
      
—
       —      
0.00
%
Other consumer
    
—
      
—
      
—
       —      
0.00
%
Construction
    
—
      
—
      
—
       —      
0.00
%
 
  
$
—
    
$
—
    
$
—
     $ 35      
0.00
%

   
Payment
Delay
    
Term
Extension
    
Interest Rate Reduction
    
Term
Extension
and Interest
Rate Reduction
    
Total Class of
Financing
Receivable
  
March 31, 2023
                              
Commercial real estate
  
$
—
    
$
—
    
$
—
    
$
—
      
0.00
%
Commercial - specialized
    
—
      
—
      
—
      
—
      
0.00
%
Commercial - general
    
—
      
2,999
      
—
      
42
      
0.60
%
Consumer:
                                        
1-4 family
    
—
      
199
      
—
      
—
      
0.04
%
Auto loans
    
—
      
40
      
—
      
—
      
0.01
%
Other consumer
    
—
      
—
      
—
      
—
      
0.00
%
Construction
    
—
      
—
      
—
      
—
      
0.00
%
   
$
—
    
$
3,238
    
$
—
    
$
42
      
0.12
%

The following table presents the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty for the three months ended March 31, 2024 and 2023 (dollars in thousands):

 
  
Principal
Forgiveness
    
Weighted-
Average
Interest Rate
Reduction
    
Weighted-
Average
Term
Extension
(Months)
  
March 31, 2024
                  
Commercial real estate
  
$
—
      
0.00
%
    
—
  
Commercial - specialized
    
—
      
0.00
%
    
—
  
Commercial - general
    
—
      
1.75
%
    
49
  
Consumer:
                        
1-4 Family residential
    
—
      
0.00
%
    
—
  
Auto loans
    
—
      
0.00
%
    
—
  
Other consumer
    
—
      
0.00
%
    
—
  
Construction
    
—
      
0.00
%
    
—
  
 
  
$
—
      
1.75
%
    
49
  

   
Principal Forgiveness
    
Weighted-
Average
Interest Rate
Reduction
    
Weighted-
Average
Term
Extension
(Months)
  
March 31, 2023
                  
Commercial real estate
  
$
—
      
0.00
%
    
—
  
Commercial - specialized
    
—
      
0.00
%
    
—
  
Commercial - general
    
—
      
0.25
%
    
43
  
Consumer:
                        
1-4 Family residential
    
—
      
0.00
%
    
10
  
Auto loans
    
—
      
0.00
%
    
15
  
Other consumer
    
—
      
0.00
%
    
—
  
Construction
    
—
      
0.00
%
    
—
  
   
$
—
      
0.25
%
    
41
  

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following presents the performance of such loans that have been modified in the last twelve months (dollars in thousands):

   
Current
    
30-89 Days
Past Due
    
90 Days or
More Past
Due
    
Nonaccrual
  
March 31, 2024
                        
Commercial real estate
  
$
2,241
    
$
—
    
$
—
    
$
—
  
Commercial - specialized
    
165
      
—
      
—
      
16
  
Commercial - general
    
1,176
      
—
      
—
      
290
  
Consumer:
                                
1-4 Family residential
    
484
      
23
      
—
      
11
  
Auto loans
    
86
      
—
      
—
      
—
  
Other consumer
    
—
      
5
      
—
      
—
  
Construction
    
2,399
      
—
      
—
      
—
  
   
$
6,551
    
$
28
    
$
—
    
$
317
  

During the three months ended March 31, 2024, the Company had $31 thousand in loans made to borrowers experiencing financial difficulty that were modified during the last twelve months that subsequently defaulted. During the three months ended March 31, 2023, the Company had no loans made to borrowers experiencing financial difficulty that were modified during the last twelve months that subsequently defaulted. Payment default is defined as movement to nonperforming status, foreclosure, or charge-off.